WTI oil price holds within narrow consolidation on Monday, trading under Friday’s high at $48.72, with downside being protected by daily Tenkan-sen at $48.32.
Oil is holding bullish sentiment following Friday’s strong rally when oil price was up 3.7% for the day, after news that big refinery in Texas was shut down circulated.
Friday’s long bullish daily candle underpins near-term action for further upside and break above $48.89 (Fibo 61.8% of $50.41/$46.44 pullback) to signal higher low at $46.44 and open barriers at $49.50 (200SMA) and $50.00 (psychological).
However, risk of fresh weakness on oversupply fears remain on the table, after report last week showed US domestic production hit its highest level since July 2015 at 9.5 million barrels a day.
Monday’s action is holding between Tenkan-sen ($48.32) and 20SMA ($48.72) which mark initial triggers.
Break lower would expose 100SMA / daily Kijun-sen at $47.93/90 and weaken near-term structure on break.
Res: 48.72, 48.90, 49.50, 50.00
Sup: 48.32, 48.00, 47.21, 47.00
