WTI oil price holds within narrow consolidation on Tuesday, following over 3.5% fall on Monday.
Pullback from new high at $75.34 (the highest since Nov 2014) extended further after last Wednesday’s strong bearish acceleration, which marked the biggest one-day fall in past few years.
Fresh weakness came after two-day consolidation (last Thu/Fri), shaped in double long-legged Dojis and was driven by strong bearish signals from daily techs.
Repeated close below 20SMA and extension below converged 30/55SMA, along with strong bearish momentum, which continues to build up, accelerated bears for probe below next key support at $68.08 (Fibo 61.8% of $63.58/$75.34 rally).
Bears now pressure thin daily cloud which twists tomorrow and attracted Monday’s acceleration.
Cloud is reinforced by rising 100SMA and may hold bears for some time, with notion being supported by oversold slow stochastic on daily chart.
Broken converged 30/55SMA’s ($69.38) should ideally cap corrective upticks to keep bears intact.
From the fundamental side, Monday’s bearish acceleration was helped by easing concerns about supply disruption, while positive signals for oil price on extension of the strike in Norway and fall in oil production from Libya, had a little impact on oil prices.
Focus turns towards release of US crude stocks data (API report is due late today and EIA is going to release its report on Wednesday).
API report showed fall in oil stocks by 6.8 million, while forecast for Wednesday’s release is for 3.5 million barrels draw after oil inventories unexpectedly fell by 12.6 million barrels last week.
Res: 68.40, 69.38, 70.00, 70.85
Sup: 67.57, 67.20, 66.36, 65.71
