Oil drops to five-week low on growing Covid concerns in Europe
WTI oil fell below $75 per barrel on Friday, hitting five-week low, as sentiment soured further on fresh concerns about the health situation in Europe.
Austria is to enter full lockdown next week, with Germany likely to follow, with rising number of new Covid-19 cases across the continent threatening of wider area lockdowns.
Renewed fears that restrictive measures could slow the economic recovery, as well as potential release of crude inventories by major economies, add pressure on oil prices.
Fresh acceleration broke below pivotal Fibo support at $76.39 (38.2% of $61.83/$85.39) and penetrated rising thick daily cloud (cloud top lays at $76.10), with today’s close below these levels to generate negative signal for extension towards next key supports at $74.09 (100DMA) and $73.61 (50% retracement of ($61.83/$85.39).
The WTI contract is on track for a biggest weekly loss since the third week of August and for a first weekly close below psychological $80 level since the first week of October.
Daily techs show rising bearish momentum while MA’s (10;20;30;55) are in negative configuration and already formed several bear crosses that adds to negative near-term tone, however, weekly close below cracked Fibo support at $76.38 is needed to confirm bearish signal..
Broken 55DMA offers initial resistance at $77.67, followed by falling 5DMA ($78.85) and psychological $80 level, which marks the breakpoint.
Res: 77.67; 78.85; 80.00; 80.39
Sup: 76.39; 75.55; 74.11; 73.61