Oil prices remain supported by weak dollar but rising US/China tensions weigh
WTI oil price regained traction and bounced from $40.70 to the session high at $41.64 in European trading on Friday, recovering a part of previous day’s drop.
However, the price action remains in a choppy mode and holding in range, with narrowing 20-d Bollinger bands, confirming scenario.
Weak dollar continues to support but rising tensions between the US and China partially offset positive impact.
The WTI contract is on track to leave the third consecutive weekly Doji candle (although at bit higher) which signals that broader recovery from record lows shows strong indecision and looks for stronger direction signals.
Violation of pivotal barriers at 43.05/36, (key Fibo barrier / 200DMA) would signal bullish continuation, while loss of $40 support would weaken near-term structure and risk deeper dips.
Res: 41.64; 42.00; 42.48; 43.05
Sup: 41.00; 40.70; 40.00; 39.23