Oil price slumps after OPEC+ agreed to increase production
WTI oil price collapsed on Monday after OPEC+ group eventually reached an agreement to boost output from August and cool oil prices that rose to the highest levels in nearly seven years.
Strong bearish acceleration (the contract is so far down 4.5% and on track for the biggest daily drop since Mar 23) sidelines bulls and opens way for deeper correction of larger uptrend from 2020 low at $6.52.
Analysts think that post-pandemic bull-cycle is at the end and suggest stronger drop in oil prices, as situation with coronavirus is worsening globally and boosting concerns about demand that prompted investors to collect profits.
Fresh weakness generated bearish signal on surge through psychological $70 level and pivotal Fibo support at $69.42 (38.2% of $57.25/$76.95).
Bears cracked the top of ascending daily cloud ($68.20) which underpinned the action in past two months, with break through cloud (spanned between $68.20 and $64.67) to further fuel fresh downtrend.
Daily studies turned bearish and support the action, but oversold stochastic warns of headwinds bears may face.
Indicators on daily and 4-hr charts are still heading south and so far lacking any signal of correction, although some price positioning should be anticipated in coming sessions.
Broken supports at $69.42//$70.00 reverted to strong resistances which are expected to cap corrective upticks and keep fresh bears intact.
Res: 68.45; 69.42; 70.00; 70.75
Sup: 67.49; 67.10; 66.15; 65.45