Oil price falls on fresh pessimism over US/China trade conflict
WTI oil fell from session high at $55.60 and tested $55 handle following the latest news.
China expressed doubts about reaching trade deal with the US that soured sentiment.
Recovery from Thursday’s one-week low at $54.49 (hit after three-day weakness which accelerated on Wednesday, on unexpected rise in US crude inventories by 5.7 mln bls vs forecasted build of 0.49 mln bls) was so far short-lived, keeping near-term bias with bears.
Wednesday’s close below converging 55/10DMA’s was bearish signal, adding to weakening momentum, breaking into negative territory and south-heading stochastic.
Bears look for clear break of cracked Fibo support at $54.63 (38.2% of $50.91/$56.91, to generate fresh negative signal for extension towards $54.24 (20DMA) and $53.92 (Fibo 50%).
Broken 55DMA ($55.35) is expected to cap and keep bears in play.
Only return and close above 100DMA ($55.88) would sideline downside risk and shift focus higher, with next-week’s daily cloud twist, also expected to be magnetic.
Res: 55.15; 55.35; 55.88; 56.00
Sup: 54.63; 54.24; 53.92; 53.61