WTI oil price is slightly higher on Monday but remains within consolidation range after three-week rally stalled at $75.30 zone last week but subsequent pullback was contained by rising 10SMA at $72 zone.
Decision of main world oil producers to increase the output and persisting concerns about escalation of global trade conflict, weigh on oil prices. On the other side, fall in US oil inventories which hit three-year low, strongly underpin oil prices. Three-week rally from $63.58 (18 June trough, part of larger, year-long uptrend from $26.04), is still intact and holding in consolidative phase, before bulls continue towards target at $76.35 (Fibo 61.8% of $107.45/$26.04 fall).
Higher base is forming at $72.50 zone and dips need to hold above it to reduce risk of deeper correction.
Rising 10SMA continues to track bulls and marks initial support (currently at $73.36), as strong bullish momentum and daily MA’s in full bullish configuration, continue to support. On the other side, Doji candle on weekly chart warns of reversal, which requires firm break below $72.50 to generate bearish signal, while stronger reversal signal could be expected on extension and break below $70.85 (Fibo 38.2% of $63.58/$75.35 rally).
Res: 74.23, 74.78, 75.34, 76.35
Sup: 73.36, 72.50, 72.13, 70.85
