Oil prices fell over 3% overnight on fresh lockdowns
Oil opened with gap-lower on Monday and fell over 3% in Asia, as fears that fresh lockdowns across the Europe will further weaken fuel demand.
Traders fears that lockdown measures announced by a number of European countries would replicate in the US, where the rate of new infections is also rising.
Concerns about weakening demand and signals that OPEC would increase supplies maintain strong pressure on oil prices, with rising uncertainty ahead of US Presidential Election adding to negative tone.
WTI contract fell nearly 10% last week, with growing signals of reversal after Apr-Aug recovery phase, keeping near-term focus shifted lower.
Daily technical studies show strong rise of negative momentum, with multiple bear-crosses, formed by daily moving averages and last week’s break of pivotal 200DMA, generating strong bearish signals.
Monday’s action broke below initial Fibonacci support at $34.96 (23.6% of $6.52/$43.75) and hit new lowest in over five months.
Bears cracked weekly Kijun-sen ($33.72) break of which would open way towards key supports at: $30 (psychological), $29.53 (Fibo 38.2% of $6.52/$43.75) and $28.10 (weekly cloud base).
Broken weekly cloud top offers solid resistance at $36.07, with extended corrective upticks expected to stall under broken falling 200DMA ($37.12) and keep bears intact.
Res: 34.96; 35.23; 36.61; 37.12
Sup: 33.61; 32.61; 31.12; 30.62