WTI oil opened with gap higher on Monday, as supply worries rose after the latest escalation of the conflict in the Middle East, which threatens of deepening crisis.
The price bounced from last week’s low, retracing around 50% of Friday’s 2.4% drop, but so far holding within a narrow range.
Bearish technical studies on daily chart suggest limited prospects for stronger recovery, with key barriers at $78.31/39 (daily cloud base / 200DMA) likely to cap extended upticks and keep near term bias with bears.
Oil was in a steep fall in past three weeks and on track for bearish monthly close in July, that adds to negative signals, with limited upticks to provide better selling opportunities.
Strong negative momentum on daily chart and MA’s in full bearish setup (converging 10/200DMA’s are likely to create a death-cross) support the notion, with repeated close below $77.06 (Fibo 61.8% of $72.46/$84.50) to confirm bearish signal and expose next targets at $75.30/00 (Fibo 76.4% / psychological).
Only firm break above 200DMA which capped the action in past five days, would harm larger bears and open way for stronger correction.
Res: 77.67; 78.39; 78.59; 79.13.
Sup: 77.06; 76.02; 75.30; 75.00.
