Oil price remains pressured but key supports still hold
WTI oil ticked lower on Friday but holds above Thursday’s low at $51.78, posted after nearly 2.5% daily fall.
Oil remains at the back foot following double-failure at pivotal $55.55 Fibo barrier (38.2% retracement of $76.88/$42.36 descend), with negative sentiment being boosted by growing worries about global economic slowdown that offsets positive impact from OPEC-led production cut.
Bearish momentum is rising on daily chart and along with 5/10/20SMA’s in bearish setup, adds to negative tone.
Bears approach important supports at $51.69 (30SMA) and $51.32 (28 Jan higher low) violation of which would expose more significant 55SMA ($50.92) and Fibo 38.2% of $42.36/$55.73 ($50.62), violation of which would generate reversal signal and risk deeper pullback.
Easing from $55.73 high (04 Feb) so far looks like deeper consolidation before bulls resume, however, the contract is on track for strong bearish weekly close which would weaken the structure.
Also, pullback cracked 200WMA ($52.35) which contained dips in past two weeks and weekly close below would add to negative outlook.
Broken 20SMA ($53.20) is expected to cap and maintain bearish near-term bias.
Res: 52.67; 53.20; 53.63; 54.28
Sup: 52.07; 51.69; 51.32; 50.92