Profit-taking to lead to limited correction before larger bears regain control
WTI oil gained traction on Monday and returned above $90 per barrel, as traders collect profits from last week’s drop to the lowest in seven months, after bears failed to register a weekly close below pivotal Fibo support at $88.42 (Fibo 61.8% of $62.42/$130.48 rally) for the third consecutive week.
Daily studies remain bearish, though oversold conditions suggest a pause in a downtrend, for likely limited correction.
Weak fundamentals continue to weigh on oil prices, as strong signals that US policymakers will remain aggressive in policy tightening that would negatively impact growth and also hurt oil demand.
Upticks should be capped by 200DMA ($95.40) to keep larger bears intact for renewed attack at $88.42 pivot, clear break of which would open way psychological $80 support.
Only bounce above $100 barrier (psychological / Fibo 38.2% of $123.65/$85.35 bear-leg) would sideline bears and allow for stronger correction.
Res: 91.66; 93.60; 94.39; 95.40
Sup: 90.00; 87.92; 86.89; 85.35