WTI Outlook: Oil is consolidating after falling nearly 6% on fears of new China tariffs

Slobodan Drvenica Windsor Brokers

US CRUDE OIL

WTI oil price is consolidating above new six-week low at $53.58, posted after nearly 6% fall on Thursday.
Oil was already under pressure after hawkish Fed on Wednesday that boosted dollar and sold after President Trump’s tweet above more tariffs on Chinese goods that soured the sentiment and intensified existing fears of lower global demand on escalation of trade conflict.
Fresh bears extended well below thick daily cloud (after recovery was strongly rejected at cloud top on Wednesday) and cracked another pivotal support at $54.55/$53.80 (Fibo 61.8% of $50.59/$60.96 / the neckline of asymmetric H&S pattern on daily chart), where bears faced headwinds.
Bearish daily techs and weak sentiment favor further weakness, which requires signal on clear break below $54.55/$53.80 pivots).
Meanwhile, upticks on profit-taking would be seen as positioning for fresh downside, with daily cloud base ($55.53) expected to ideally cap and guard a cluster of daily MA’s at $56.39/75 zone (10/200/55DMA’s) which marks upper trigger.

Res: 55.23; 55.53; 56.39; 56.75
Sup: 54.12; 53.58; 53.04; 51.71

Interested in WTI technicals? Check out the key levels

1. R3 61.53
2. R2 59.77
3. R1 57.15
PP 55.39
1. S1 52.77
2. S2 51.01
3. S3 48.39

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

EUR/USD retreats toward 1.1600 after upbeat US data

EUR/USD pulls away from session highs and declines toward 1.1600 in the American session on Wednesday. Upbeat private sector employment and ISM Services PMI data from the US help the US Dollar (USD) stay resilient against its rivals, limiting the pair's upside.

GBP/USD meets resistance around 1.3400

In line with its risk-linked peers, GBP/USD stages a modest comeback on Wednesday, although meeting some resistance around the 1.3400 neighbourhood. Cable’s humble recovery struggles to gather momentum as the Greenback benefits from better-than-forecast macroeconomic data releases.

Gold loses traction after testing $5,200

Gold corrects lower after testing $5,200 but manages to stay in positive territory in the second hald of the day on Wednesday. The precious metal remains well supported by the deterioration of the geopolitical scenario in the Middle East, while the US Dollar's resilience caps the upside.