WTI Oil Outlook: Bears Pressure Key $50 Level But Final Break Might be Delayed for Consolidation

Technical analysis of Forex market

WTI oil remains in red and extends to new six-month low ($50.66) on Monday, increasing pressure on psychological $50 level. The sentiment remains extremely weak on persisting concerns about strong negative impact on global oil demand on spreading China virus. The WTI contract registered fall of nearly 16% in January, which is the worst monthly performance since May 2019. Weakness may accelerate if $50 trigger gives way as this zone marks the floor of multi-month congestion ($50/$66.54). Eventual monthly close (Jan) below $51.75 pivot (Fibo 61.8% of $42.61/$66.54) after triple failure (Jun/Aug/Oct) adds to negative signals, which would be verified on clear break of $50 pivot. Daily techs are firmly bearish but oversold, which would add to positive signals from OPEC+ about increasing production cut that may keep bulls on hold above $50 level and likely provide better levels for re-entering bearish market. Falling daily Tenkan-sen ($54.50) is expected to cap extended upticks and maintain bearish bias.

Res: 51.75; 52.54; 53.37; 54.50
Sup: 50.66; 50.49; 50.00; 48.26

– advertisement –