US oil remains under strong pressure on global oversupply that sent the price significantly lower during past two weeks. Oil price slumped from April’s high at $53.74 to the levels below psychological $50%, loss of which has generated another strong bearish signal.
The fall found temporary footstep just under $49.00, above which the price entered consolidation phase.
Long upper shadows of past three day’s candles signal strong recovery rejections and keep the downside under pressure, but on the other side, hopes that major oil producers would reach an agreement to extend production cut, balances the market for now.
Extended consolidation could be expected while current lows at $48.93/87 hold, however, thickening daily cloud (base is currently at $50) continues to weigh.
Stronger recovery signals require break above Mon/Wed highs at $50.18 and daily Kijun-sen at $50.41 to ease persisting bearish pressure.
Otherwise, loss of temporary base would look for extension towards 48.64 (Fibo 76.4% of $47.07/$53.74 rally and unmask key short-term support at $47.07.
Res: 50.00, 50.18, 50.41, 51.02
Sup: 48.90, 48.64, 48.37, 47.79
