WTI oil stand at the back foot in the mid-European session and moved lower after recovery attempts from Tuesday’s low at $66.84 were capped by the base of 4-hr cloud (spanned between $67.55 and $68.02).
Fresh attempts to extend Tuesday’s strong fall (oil price was around $2 down) and pressures cracked floor of recent $67.10/$69.54 congestion.
Eventual close below 10SMA on Tuesday was negative signal, reinforced by significant loss of momentum, keeping near-term risk at the downside.
Break below $67.10 and next pivots at $66.88 (rising 10SMA) and $66.58 (Fibo 38.2% of $61.80/$69.54) is needed to generate stronger bearish signal and trigger deeper correction of $61.80/$69.54 upleg.
US API crude stocks data, released on Tuesday, showed strong build in crude inventories (3.42 million barrels) while focus turns on today’s release of EIA weekly crude stocks data, which are forecasted for 0.73 million barrels build, following last week’s unexpected build of 2.17 million barrels.
Another negative figure from crude inventories report could put oil price under fresh pressure which could result in reversal signal and sideline broader bulls for deeper correction.
Bearish scenario on loss of $67.10/$66.58 pivots would open targets at $66.09 (rising 30SMA) and $65.67 (daily Kijun-sen).
Conversely, oil price may remain within extended consolidation range while pivotal supports hold.
Broken 10SMA marks initial resistance at $68.03 and sustained break here would sideline persisting downside risk and shift near-term focus higher.
Res: 67.83, 68.03, 68.87, 69.32
Sup: 67.10, 66.88, 66.58, 66.09
