US oil is on track for strong bearish weekly close (the first one after three weeks in green) signaling extension of pullback from $53.74 high, posted on 12 Apr.
The price found temporary footstep at $50.06, low of Wednesday’s strong fall, with downside being reinforced by daily Kijun-sen line, currently at $50.40.
Yesterday’s close below thin daily cloud maintains bearish pressure, however, oil price may hold in extended consolidation while above $50.06 low.
Limited upside attempts are expected, with daily cloud (spanned between $50.74 and $51.15) offering initial resistance and extended upticks expected to hold below daily Tenkan-sen line at $51.90.
Eventual break below psychological $50.00 support would open immediate target at $49.62 (Fibo 61.8% of $47.07/$53.74) and may accelerate to $48.70 (weekly Kijun-sen) in extension.
Oil price remains under pressure on fears that increased US shale oil production may offset OPEC attempts to support prices by reducing oil production.
Res: 50.74, 51.15, 51.36, 51.90
Sup: 50.40, 50.06, 49.62, 48.70