Oil price consolidates after two-day fall; fresh direction signals on break of $56.60 or $60.00
WTI oil price rose on Thursday after traders booked profits from two-day nearly 6% fall.
Dip from four-month high at $63.36 found footstep at $57.70, where weekly cloud base and rising 5DMA offered solid support.
Oil price surged after attack on Saudi oil installations but quickly changed direction after Saudi officials announced that the damage will be fixed in a much shorter than initially estimated time that reduced risk of more significant supply disruption and prompted investors to sell oil contracts.
Fresh doubts in the market about the speed of recovery, out fresh bears on hold, but recovery was so far limited as upticks showed signs of stall under pivotal $60 barrier (psychological level / near Fibo 38.2% of $63.36/$57.67 bear-leg).
Further consolidation is likely to precede fresh action, as mixed daily studies (rising bullish momentum and daily MA’s in bullish setup conflict south-heading stochastic and flat RSI) contribute to lack of clearer direction signals.
Stronger bearish signal could be expected on break below $57.70/57 (weekly cloud base / Fibo 61.8% of $53.99/$63.36 ascend) that would open way towards daily cloud (spanned between $55.75 and $54.85) and attempts to fill Monday’s huge gap higher.
Conversely, firm break above $60 zone would generate bullish signal for stronger recovery.
Res: 59.52; 59.84; 60.00; 60.52
Sup: 58.07; 57.70; 57.57; 56.20