WTI OIL – correction to precede fresh upside
WTI oil stays in red on Wednesday after previous day’s negative close which generated reversal signal.
Fresh weakness pressures solid support at $63.25, provided by rising 10SMA, with break here needed to generate fresh bearish signal.
Larger bulls look for correction before continuing higher as overall sentiment remains firm on OPEC-led production cut which resulted in continuous draws in US crude stocks that boosted oil price.
Correction is also signaled by reversal of overbought daily RSI and slow stochastic.
Loss of 10 SMA handle would open rising 4-hr cloud ($63.07/$62.13) and Fibo 38.2% of $56.08/$64.87 at $61.61, in extension.
Conversely, early downside rejection (ideally above 10SMA / 4-hr cloud top) would prompt bulls for retest of recent over three-year peak at $64.87 and extension of larger recovery leg from $44.18 (21 June 2017 trough).
Res: 63.94; 64.87; 65.00; 65.88
Sup: 63.25; 63.07; 62.80; 62.13