WTI Oil Outlook: Limited Reaction on Downbeat Crude Inventories But Overbought Studies Warn of Pullback

Technical analysis of Forex market

WTI oil price bounced near new four-year high after short-lived spike to session low at $74.30 after US crude inventories rose much above forecast. EIA report showed US crude stocks were up 7.97 million barrels in the past week, strongly overshooting forecast for 1.98 million barrels build and previous week’s build of 1.85 million barrels. However, immediate reaction on downbeat data was minor, as oil price bounced back quickly, signaling that bullish sentiment on rising fears over the impact on global supply by US sanctions to Iran, persists. Strong bullish momentum on daily chart suggests further advance, but bulls could be delayed as daily studies are overbought. Indicators (RSI and slow stochastic) are still in overbought zone and lacking firmer signal, however, deeper corrective pullback cannot be ruled out. Rising 10SMA ($72.86) is expected to contain extended dips and prevent stronger correction which would put bulls on hold.

Res: 75.89; 76.35; 77.00; 77.79
Sup: 74.30; 73.63; 72.86; 71.47