WTI OIL – strong $60 support zone holds for now but daily cloud top caps and maintains bearish bias
WTI oil moved higher and holds in $61 zone on Thursday after dipping to $60.11 low on downbeat US crude stocks data on Wednesday.
EIA report showed much stronger than expected build in crude inventories last week (5.02 million barrels vs forecasted build of 2.02 million barrels) which raised concerns about global oil demand.
Increasing US oil production also keeps oil price pressured.
Strong $60 support zone (psychological support, reinforced by rising 100SMA) so far contained repeated attacks, but remains under pressure and risks eventual break lower.
Thick daily cloud continues to weigh, as cloud base ($61.23) caps near-term action, maintaining bearish bias.
Weakening momentum studies support the notion, with renewed attacks at $60 zone to be expected while the price remains below cloud base.
Eventual break through the base forming at $60 zone would signal continuation of bear-leg from $64.22 (26 Feb high).
Penetration of daily cloud would sideline immediate downside risk, but plethora of daily MA barriers above, would signal limited upside.
Res: 61.23; 61.42; 61.84; 62.53
Sup: 60.80; 60.49; 60.11; 59.94