Recovery extends on profit-taking / trade talks optimism
WTI oil extends recovery into second day as traders booked profits from strong fall in past two weeks.
Slight optimism on progress in US-China trade talks, which are due to resume this week, also inflates oil price.
Thursday’s Hammer candle underpins recovery, helped by rising momentum and north-heading daily stochastic, which formed bullish divergence before emerging from oversold zone.
Recovery faces strong barriers at $51.51 (falling 10DMA) and $54.82 (daily cloud base), with break here to generate initial bullish signal, which would require confirmation on lift above $55.57/73 (Fibo 38.2% of $63.12/$50.91 / daily cloud top).
Caution on failures under these barriers that would generate initial signals of recovery stall and risk fresh weakness, as larger downtrend from $63.12 is still intact.
Res: 54.31; 54.52; 54.82; 55.57
Sup: 53.47; 53.03; 52.51; 51.98