Oil eases from new multi-month high, pressured by demand recovery fears, stronger dollar
WTI oil fell over $1 on Monday, easing from new multi-month high at $52.74, posted last Friday, after nearly 9% weekly rise (the biggest one-week gain since early May), as bulls faced strong headwinds on approach to pivotal barrier at $53.21 (200WMA).
Stronger dollar on hopes for more stimulus to boost recovery of the US economy and renewed concerns about global oil demand amid strict lockdowns around the world on raging new wave of coronavirus, weigh on oil prices and generate selling pressure.
Growing concerns over China’s demand due to spike in new Covid-19 cases in the country and fears of new lockdowns that would hit the second biggest oil consumer in the world, add to negative signals.
Overextended daily studies also prompt traders to collect profits after last week’s $5.5 rally.
Fresh weakness cracked initial support at $51.68 (broken Fibo 76.4% of $65.63/$6.52 fall) with close below to signal a false break and risk return below psychological $50 support and deeper pullback towards pivotal supports at $49.55 and $48.66 (rising 10/20DMA’s respectively).
Res: 52.74; 53.21; 54.00; 54.62
Sup: 51.53; 51.12; 50.78; 50.00