WTI oil consolidates above daily cloud base ($68.51) on Friday, following strong fall on Wed/Thu when oil price registered losses of nearly 5%.
Strong bearish acceleration was sparked by unexpected build in crude inventories, which further soured sentiment.
Extension of near-term downtrend from $76.88 (10Oct high) retraced over 61.8% of $64.43/$76.88 ascend and tested the base of daily cloud, which provides temporary footstep.
The latest data showed that economic growth in China, world’s largest oil importer, slowed in Q3 which could have further negative impact on oil prices.
Current political tensions over murdered Saudi journalist and concerns about supply shortage when US sanctions on Iran take effect on 04 November, showed were so far unable to dent bears.
Bearish daily techs (10/20 / 10/30 SMA’s bear crosses / strengthening bearish momentum) add to negative outlook, with two big red weekly candles (WTI contract is on track for the second strong bearish weekly close) continue to weigh.
Meanwhile, profit-taking and oversold conditions may trigger consolidative / corrective action, before bears resume towards $67.38 (200SMA / Fibo 76.4% of $64.43/$76.88).
Daily cloud top ($69.89) marks solid barrier, reinforced by 55SMA, which is expected to ideally cap and guard former low at $70.49, violation of which would sideline immediate bears for stronger correction.
Res: 69.89, 70.00, 70.49, 71.57
Sup: 68.51, 67.93, 67.37, 66.85
