Bears are pausing above new multi-month low
WTI oil price falls to new multi-month low on Monday ($77.19, the lowest since Jan 5), in extension of last Friday’s 5.1% drop and a weekly loss of 6.5%, on track for the fourth consecutive strong monthly fall.
Near-term action is consolidating above new low, but so far remains capped by broken psychological $80 support, which reverted to solid resistance.
Oil is in steep downtrend since mid-June, as stronger dollar and growing fears that large economies are sliding into recession that would strongly hurt demand, offset concerns about supply shortage on the shockwaves that the conflict in Ukraine send through the energy markets and economies.
Strong bearish signal has been generated on a weekly close below key supports at $83.13/$80.00 (Fibo 38.2% of post-pandemic $6.52/$130.48 rally / psychological) adding to previous signal on completion of failure swing pattern on weekly chart.
The downtrend was so far contained by rising 100WMA ($77.78), which may provide a temporary base and allow larger bears to consolidate.
Technical studies remain bearish on daily chart and turning to negative setup on weekly, while momentum indicator on monthly chart is pressuring the centreline, on track to break into negative territory, complementing weak fundamentals.
Repeated daily close below $80 level would keep immediate bears intact, though extended upticks cannot be ruled out, but expected to stall under falling 10 DMA ($84.00) to keep larger bears unharmed.
Res: 81.17; 81.73; 83.13; 84.00
Sup: 78.48; 77.78; 77.19; 74.25