WTI Oil – bearish bias below $90 barrier

WTI oil opened $5 higher and gained over 6% at the start of the week, as “Trump Indicator” (one of key fundamental market drivers nowadays) changed direction during the weekend on fresh tensions over Strait of Hormuz, which was opened on Friday and closed again shortly after.

Today’s price jump partially offset optimism, sparked by Friday’s price drop of about 10% that hit the lowest since early March.

Although the overall picture has been darkened by the latest developments that raise fears of fresh escalation (that may have strong negative impact, not only on the region, but the global economy) technical picture on daily chart is expected to remain bearishly aligned while the price stays below $90 barrier (which caps upticks for the fourth consecutive session).

Negative momentum studies and the action weighed by two consecutive large bearish weekly candles, contribute to such scenario, but situation on the battlefield (extended ceasefire and peace talks or fresh escalation) is likely to have a key impact on crude oils’ price direction.

Repeated daily close below $90 to maintain slight bearish bias and risk retest of 55DMA ($82.63) guarding more significant $80/$79 zone, break of which to confirm signal of bearish continuation.

On the other hand, sustained break above $90 would provide relief, but extension above $94 will be needed to confirm the signal.

Res: 90.00; 91.80; 92.46; 93.71
Sup: 84.50; 82.63; 80.00; 79.00