WTI OIL – recovery needs close above 10SMA to resume
WTI oil price bounced on Friday following two-day consolidation above correction low at $54.80, posted after sharp fall on Tuesday.
Recovery was so far capped at $56.00 zone (Fibo 38.2% of $57.90/$54.80 pullback) with break here needed to signal bullish extension towards pivotal barrier at $56.30, provided by 10SMA.
Close above the latter would signal formation of higher low at $54.80 and spark further recovery.
Rising 20SMA which contained pullback continues to underpin (currently at $54.99), with daily slow stochastic reversing from oversold territory and supporting scenario.
However, oil remains vulnerable as rising US supplies and concerns over Russian support for extension of oil output cut continue to weigh on oil prices.
Downside is expected to remain at risk while 10SMA caps with violation of $54.80 pivot expected to spark fresh weakness, as oil is on track for bearish weekly close, the first close in red after five consecutive bullish weeks.
Res: 56.00; 56.30; 56.72; 57.17
Sup: 55.53; 54.99; 54.80; 54.53