Oil is consolidating after falling nearly 6% on fears of new China tariffs
WTI oil price is consolidating above new six-week low at $53.58, posted after nearly 6% fall on Thursday.
Oil was already under pressure after hawkish Fed on Wednesday that boosted dollar and sold after President Trump’s tweet above more tariffs on Chinese goods that soured the sentiment and intensified existing fears of lower global demand on escalation of trade conflict.
Fresh bears extended well below thick daily cloud (after recovery was strongly rejected at cloud top on Wednesday) and cracked another pivotal support at $54.55/$53.80 (Fibo 61.8% of $50.59/$60.96 / the neckline of asymmetric H&S pattern on daily chart), where bears faced headwinds.
Bearish daily techs and weak sentiment favor further weakness, which requires signal on clear break below $54.55/$53.80 pivots).
Meanwhile, upticks on profit-taking would be seen as positioning for fresh downside, with daily cloud base ($55.53) expected to ideally cap and guard a cluster of daily MA’s at $56.39/75 zone (10/200/55DMA’s) which marks upper trigger.
Res: 55.23; 55.53; 56.39; 56.75
Sup: 54.12; 53.58; 53.04; 51.71