WTI dips below $40 as record US unemployment dents risk sentiment and inflates dollar
WTI oil fell over 1 ½ dollar in US trading on Thursday as traders moved from riskier assets into dollar after weekly jobless claims, although coming out lower than expected, still showing a record number of Americans remaining unemployed that dented risk sentiment.
Oil price moves below $40 mark for the first time in five days and is on track to form the daily candle with big body after eight consecutive Dojis, with initial signs of generating negative signal as today’s candle is red.
Uncertainty over global demand recovery amid rising virus cases, particularly in the US and strong build in US crude stocks, weighs on oil prices as strong recovery rally from record lows, ran out of steam and remains stuck at $40 zone for the sixth straight week.
Thursday’s bearish close would be initial negative signal which would require break below 20/30DMA’s ($39.23/$38.57) for confirmation.
Fading bullish momentum and south-heading daily RSI/Stochastic add to weak fundamentals and support the scenario.
Res: 40.00; 40.96; 41.07; 41.61
Sup: 39.25; 38.57; 37.49; 37.06