WTI oil stands at the back foot on Thursday after previous day’s action closed in red. Oil price fell on Wednesday on disappointing US data which showed a build in oil inventories by 2.2 million barrels, against forecasted draw of 2.8 million barrels.
Oil price pulled back after hitting new multi-month high at $57.90, closing in red for the second day.
Wednesday’s daily candle with long upper shadow also signals heavy upside and risks deeper pullback.
Overextended daily studies support the notion as RSI is overbought and slow stochastic is reversing from overbought territory.
Stronger bearish signal could be expected on violation of rising 10SMA ($55.54), while extended consolidation is seen while the latter holds.
Break below 10SMA would risk extension towards $54.53 (Fibo 38.2% of $49.09/$57.90 ascend).
Res: 57.00, 57.67, 57.90, 59.04
Sup: 56.67, 56.40, 55.82, 55.54
