WTI oil price holds in red and eases from 2019 high after bulls faced triple rejection at falling 100SMA.
Corrective easing could be anticipated as daily slow stochastic reverses in deep overbought zone and momentum turned in neutral mode.
Tuesday’s Doji signaled indecision, adding to signs of bulls losing traction and subsequent consolidative/corrective phase.
Initial supports at $55.73/55 (former high/broken Fibo barrier) contained Tuesday’s dip, keeping bulls intact and signaling extended consolidation above these supports.
However, deeper correction cannot be ruled out on profit-taking after five-day rally and overbought conditions, with deeper dips expected to find ground above converged rising 10/20SMA’s ($54.48/$54.14), to maintain bullish bias. Rising US crude production continues to hurt bulls, as booming US shale oil production rose to a record high, offsetting positive signals from OPEC-led output reduction which aims to further tighten oil markets.
Traders await release of US weekly crude inventories reports to get more information about oil’s near-term direction.
American Petroleum Institute’s report report is due later today, while official government data from US Energy Information Administration (EIA) will be released on Thursday (3.1 mln bls build f/c vs 3.6 mln bls build previous week).
Res: 56.73; 57.43; 58.14; 59.62
Sup: 55.55; 54.48; 54.14; 53.60
