WTI OIL bounces back above daily cloud but gains were so far limited
WTI oil trades higher on Monday, bouncing above daily cloud which was penetrated on Friday, in extension of last week’s steep fall.
Oil price regained ground as global stocks showed signs of stabilizing, following last week’s roller-coaster ride.
Recovery was signaled by oversold daily studies after steep descend from $66.28 (02 Feb lower top) showed signs of fatigue and profit-taking boosted the price.
However, growing pressure on crude price on rising US oil production which could further undermine efforts from main oil producers to tighten oil market by reducing global production, keeps the downside vulnerable.
Return above ascending daily cloud which offers significant support (the cloud is spanned between $59.63 and $57.03) was so far limited by the base of thick hourly cloud and broken 55SMA ($60.82/91).
Stronger bullish signal could be expected on firm break above 55SMA and $61.20 barrier (Fibo 38.2% of $66.28/$58.06 bear-leg) which would neutralize persisting bearish threats and signal stronger recovery.
Conversely, failure to hold above psychological $60.00 level (also broken Fibo 61.8% of $55.81/$66.64 rally) would risk fresh weakness and renewed probes into daily cloud
Res: 60.91; 61.20; 62.07; 62.35
Sup: 60.00; 59.51; 59.08; 58.37