Range-trading extends into second week in absence of stronger direction signals
WTI oil price is trading within narrow range on Monday and extending directionless mode into second week.
Talks between Iran and major powers over the weekend ended in overall positive tone that increased pressure on oil price, but negative impact was offset by strong rise in US consumer spending that signals positive outlook for oil consumption.
Pullback from 15 July high ($60.98) following repeated failure to clearly break above psychological $60 barrier, was contained by the base of thick daily cloud, which continued to limit downside attempts during past six days.
Daily studies are in bearish configuration but oil price lacks strength for eventual break below cloud base (currently at $55.86), as fundamentals continue to send mixed signals.
Bearish scenario sees risk of extension towards key Fibo support at $54.55 (61.8% of $50.59/$60.96) on firm break of daily cloud base.
Conversely, strong bullish signal can be expected on rally through a cluster of converged daily MA’s (200/55/20/30) in $57.00/44 zone.
More likely near-term scenario could extended range-trading between clod base and MA’s, as price action is looking for a catalyst that would generate fresh direction signal.
Res: 56.33; 56.54; 57.00; 57.44
Sup: 55.86; 55.31; 55.00; 54.84