WTI oil probes again through psychological $40 barrier on Friday after the first attack on 8 Jun failed.
Bullish sentiment was restored after completion of shallow $40.41/$34.33 pullback on renewed hopes of improvement in global demand, with growing fears of the second wave of coronavirus having so far minor negative impact.
Oil prices were additionally boosted by promise of OPEC+ group to meet supply cuts, agreed earlier, with signs that curbs by the group of main oil producers could deepen next month.
Daily analysis show that bullish momentum is picking up and MA’s (5/10/20) in bullish setup underpin the action.
Also, formation of bullish engulfing on weekly chart contributes to positive signals.
Bulls need eventual close above $40 level to generate fresh bullish signal and unmask next significant barrier at $45.25 (200DMA).
Caution on overbought stochastic on both, daily and weekly chart (weekly indicator already reversed lower) which may slow bulls.
Another failure to close above $40 pivot would signal extended congestion but the action is expected to remain biased higher as long as price holds above trendline support ($37.25) and rising 20DMA ($36.70).
Res: 40.41; 41.00; 41.84; 42.73
Sup: 39.75; 38.74; 37.97; 36.70
