Brent price moved higher on Friday after strong fall in past two days, when the contract registered losses of 5.4%, on strong fall in equity markets, as well as fading supply concerns.
Stronger than expected rise in US crude stocks (EIA report showed build of 5.98 million barrels vs 2.62 million barrels forecast) added pressure on oil price.
Positive data from China which showed robust Chinese crude imports, offered support to oil prices and provided temporary relief, however, oil is on track for strong bearish weekly close (the first weekly loss after four consecutive weeks in green), which marks negative signal.
Also, Thursday’s marginal close below pivotal $80.50 support (Fibo 38.2% of $70.39/$86.73 / 30SMA) and rising bearish momentum on daily chart, add to negative outlook.
Weekly close below $80.50 would generate fresh bearish signal for extension of pullback from $86.73 (03 Oct high).
Corrective upticks so far look like positioning for fresh weakness, with rising 20SMA ($81.88) expected to cap.
Only return and close above broken bull-trendline ($82.60) would sideline downside risk and signal stronger recovery.
Res: 81.45, 81.88, 82.60, 83.67
Sup: 80.50, 80.00, 79.79, 79.16
