WTI Oil remains at the back foot on Thursday, but moving at the lower pace, compared to a steep fall in past few sessions when oil price was down around four dollars.
Key drivers of oil price were signals of increased US oil production on new policies of Trump’s administration and calmer geopolitical situation in the Middle East.
Global oil demand could be also dampened by trade tariffs, which might be imposed on a number of countries, potentially to the EU that would send additional shockwaves through the market.
Unexpected rise of US crude stocks (API report) added to negative near term outlook.
While fundamentals remain weak, technical picture is slightly brighter.
Daily studies remain positive overall, as MA’s are in bullish configuration, momentum is still positive and the price is facing strong supports at $74.70 zone (Fibo 38.2% retracement of $66.98/$79.35 / converged 20/200DMA about to form golden cross), with today’s action being so far shaped in daily Doji and suggesting that near-term bears off $79.35 peak, might be losing traction.
However, these initial signals will require confirmation on extension through initial trigger at $76.00 zone (base of thick 4-hr cloud) then $76.43 (broken Fibo 23.6%) and finally lift above 10DMA ($76.98) to generate reversal signal.
Otherwise, limited upticks would signal that bears might be consolidating for fresh push lower, but sustained break through 200DMA will be needed to signal bearish continuation.
Res: 76.09; 76.43; 76.98; 77.18.
Sup: 75.01; 74.76; 74.62; 74.02.
