WTI Oil Outlook: WTI Oil On Track For A Weekly Drop Of Over 5%

Technical analysis of Forex market

Bears are taking a breather and consolidating above three-month low ($62.39) in early Friday trading, following a steep fall in past six days.

The contract is on track for a weekly loss of over 5% as surging cases of Delta variant of coronavirus and new lockdowns in some countries, raised fears about slowdown in global demand and soured the sentiment, with fresh risk aversion in the market that pushed the dollar higher, also weighing on oil prices.

The recent drop retraced over 61.8% of the upleg from $57.25 (Mar 23 trough) to $76.95 (July 6 peak), marking the biggest correction in 2021 so far.

Daily studies are in bearish setup and favor further weakness after the correction, signaled by oversold conditions and fading bearish momentum, as well as expectations for profit-taking at the end of the week.

Strong barriers at $64.78 (broken Fibo 61.8%) and $65.02/12 (former double-bottom of July 20/Aug 9) should ideally cap upticks and keep bears intact, but stronger correction cannot be ruled out.

Falling 10DMA ($66.69) marks next significant obstacle, guarding 100DMA ($67.79) which is expected to limit extended upticks.

Res: 64.00, 64.78, 65.12, 66.00.
Sup: 63.00, 62.39, 61.90, 61.54.