Bears are on track for a weekly drop of around 8%
WTI oil is consolidating within a narrow range in early Friday’s trading after bears accelerated on Thursday, pushing the price down nearly 4% for the day.
Oil came under fresh pressure on concerns about weakening demand in China, world’s biggest oil importer and further interest rate increases by the US Federal Reserve, which would drive the US economy into recession.
Thursday’s strong fall added to negative near-term performance as the WTI is on track for the second consecutive weekly loss, with this week’s drop being around 7.7%.
Thursday’s drop came just ticks ahead of key support at $81.29 (Oct 18 trough, reinforced by 100WMA), where bears faced headwinds.
The action may hold here for limited consolidation, as daily studies are oversold, before resuming lower as overall picture on daily chart is bearish and weekly studies are weakening that adds to negative fundamentals.
Final break through $81.29 pivot would generate fresh bearish signal on completion of a double-top pattern on daily chart ($93.60/$93.72, Oct 10 / Nov 7 peaks respectively) and open way towards targets at $80.37/$80.00 (Fibo 76.4% of $76.29/$93.72 / psychological).
Broken Fibo 61.8% ($82.95) should ideally cap and keep bulls intact, with extended upticks to stay under broken Fibo 50% ($85.00).
Res: 82.61; 82.95; 84.15; 85.00
Sup: 81.29; 81.00; 80.40; 80.00