WTI OIL – limited pullback to keep larger bulls intact

WTI oil edged higher in early Wednesday, following 1.4% drop previous day, keeping larger bulls intact and suggesting that pullback from new multi-month high ($87.61) is likely to be shallow.
Negative impact from bigger than expected build in US crude inventories (API report) was short-lived, as oil price remains well supported by geopolitical tensions in the Middle East and growing fears that the conflict could escalate and spread into the region.

Technical picture on daily chart remains bullish (strong positive momentum / MA’s in bullish configuration), as pullback from $87.61 peak was contained by broken Fibo level ($84.57) and rising 10DMA, which tracks the uptrend for one month.

The price may hold in prolonged consolidation within the current range, before fresh push higher, but expected to keep bullish bias while above rising 10DMA ($85.05).
Violation of $87.61 top to expose targets at $88.56 (Fibo 76.4% of $95.00/$67.70 downtrend) and $90.00 (psychological).

Caution on break below 10DMA and $84.65 higher base, which would risk deeper correction.

US inflation report and EIA weekly crude stocks will be in focus as top economic events on Wednesday.

Res: 86.14; 87.08; 87.61; 88.56
Sup: 85.05; 84.57; 83.78; 83.10