WTI oil rose to new nearly five-month high above $62 on Tuesday, in extension of Monday’s 2.7% rally (the second biggest one-day gains in 2019).
Oil prices rallied on stronger than expected Chinese Manufacturing data on Monday that offset negative impact on rising concerns about lower demand and remain supported by production cut by main world oil exporters and possibility of further sanctions on Iran and Venezuela.
Monday’s break and close above 200SMA was strong bullish signal for continuation of larger uptrend from 2018 low at $42.36, which was on hold for two-week consolidation.
Improved sentiment supports the action for extension towards next targets at $63.69/87 (Fibo 61.8% of $76.88/$42.36 / base of thinning weekly cloud), however, overbought RSI / slow stochastic warns that bulls may take a breather before attacking targets.
Broken 200SMA should ideally contain, but deeper dips towards former highs ($60.37) and rising 10SMA ($60.08) cannot be ruled.
Bulls are expected to remain intact while holding above broken psychological $60 barrier, now reverted to support.
Res: 62.15, 63.00, 63.69, 63.87
Sup: 61.52, 60.59, 60.37, 60.08
