Bulls take a breather despite geopolitical tensions
WTI oil price eased further on Tuesday as initial fears about US/Iran conflict escalation started to fade.
Oil price rallied last Friday and extended rally to new multi month high ($64.53) on Monday, but gains after gap-higher opening at the beginning of the week were short-lived.
Bearish daily candle with long upper shadow that was left o Monday, suggests that bulls are losing traction and reaction on rising geopolitical tensions was not as strong as initially anticipated.
However, oil price remains supported by current situation, as well as higher compliance among the OPEC members’ production cut agreement.
On the other side, strong output from the US shale oil producers and Russia hitting the highest output since 1987, weigh on oil prices.
Markets are cautious and awaiting next steps of Iran and the US and also focusing on releases of US Crude inventories reports (API is due later today and EIA on Wednesday).
Fading bullish momentum on daily chart suggests corrective easing before bulls regain full control.
Rising 10DMA ($61.66) marks initial support, with deeper dips expected to stall on approach to rising 20DMA ($60.73) and keep larger bulls intact for renewed probe above pivotal Fibo barrier at $63.73 (61.8% of $76.78/$42.61) and possible extension towards key barrier at $66.54 (2019 high).
Res: 62.97; 63.89; 64.53; 65.00
Sup: 62.15; 61.66; 60.73; 60.00