Fed, China, Venezuela add to positive signals for bullish continuation
WTI oil consolidates under new nine-week high at $54.91, posted on Wednesday, after oil extended gains on weaker dollar after dovish Fed.
Eventual break above recent congestion to ($54.54) was initial signal that consolidative phase is over and bulls look for extension of recovery rally from $42.36 (24 Dec low, the lowest in 2018).
Several factors support scenario, soft tone from Fed that could keep the greenback under pressure; better than expected data from China, which revive hopes for steady demand; political turmoil in Venezuela that threats supply disruption and lower than expected rise of US crude inventories.
Bulls need close above cracked former high at $54.48 (21 Jan) and extension through pivot at $55.55 (Fibo 38.2% of $76.88/$42.36) to generate stronger signal for continuation.
Broken ascending 10SMA ($53.38) offers solid support which should ideally contain and keep bullish bias intact.
Ascending 20SMA marks pivotal support at $52.21, violation of which would soften near-term tone and sideline bulls.
Res: 54.67; 54.91; 55.55; 56.00
Sup: 53.90; 53.38; 52.65; 52.21