WTI oil holds in red and eased to $69.55 on Tuesday, reversing a part of previous day’s strong rally, as report showed that OPEC output rose to the highest this year, raising concerns about oversupply.
However, pullback was so far limited and bullish bias is expected to remain in play while broken 55SMA ($69.17) holds, but repeated failure at key $70.20 barrier (Fibo 38.2% of $75.34/$67.03) could be a negative signal.
Technical studies show daily MA’s in mixed mode, strengthening momentum and reversal attempts of slow stochastic after touching overbought zone boundary.
Fundamentals are likely to be main drivers of the price, with focus turning on weekly crude stocks data (API report is due later today and EIA will release crude inventories report on Wednesday).
Another draw in stocks could be supportive factor for oil price.
Bullish scenario requires sustained break above $70.20 pivot to spark fresh acceleration higher and expose targets at $71.19 (Fibo 50%) and $72.19 (Fibo 61.8% of $75.34/$67.03 fall).
Conversely, stronger dip could be expected on loss of 55SMA support, which would risk dip towards $68.24 (27 July low) and $67.92 (rising 100SMA).
Res: 70.28, 70.42, 71.19, 71.64
Sup: 69.55, 69.17, 68.92, 68.24
