WTI OIL – bulls are pausing after 55SMA capped the rally on Friday
WTI oil price eased on Monday and trading within narrow consolidation under new two-week high at $62.52, posted on strong rally last Friday.
Friday’s bullish acceleration was capped by ascending 55SMA and Fibo 61.8% of $64.22/$69.94 bear-leg and today’s consolidation is limited by daily cloud top (currently at $62.26).
Concerns over increased US drilling activity (report on Friday showed the number of US oil rigs increased by four, to bring the total number of active rigs to 800).
Rising US production could overshadow recent positive signals on expectations for increasing global oil demand and further obstruct near-term bulls.
Daily techs are in mixed mode and lacking stronger bullish momentum which keeps the risk of recovery stall in play while 55SMA caps.
Initial support at $61.87 (20SMA) holds for now and keeps downside risk limited.
Break here would signal stronger correction of $60.11/$62.52 upleg and expose key near-term support at $61.23 (daily cloud base), loss of which will be bearish.
Bullish scenario sees lift above daily cloud as minimum requirement, with break and close above 55SMA to signal continuation of recovery phase from $60 zone base, towards initial barrier at $63.21 and $64.00 zone seen in extension.
Res: 62.26; 62.61; 63.00; 63.21
Sup: 61.87; 61.47; 61.23; 60.80