WTI oil is holding within narrow consolidation above fresh five-week low at $60.26 on Friday, after suffering heavy losses during the week.
Oil remains under strong pressure on increased US oil production, with fresh pressure coming from announcement of Iran’s plans to boost production.
Steep two-week fall from recovery peak at $66.64, posted on 25 Jan, threaten of further extension through key supports at $60.00 zone (psychological support / Fibo 61.8% of $55.81/$66.64 ascend) and $59.51 (top of rising daily Ichimoku cloud).
Bears may take a stronger breather as ascending daily cloud underpins and daily slow stochastic is deeply oversold, but so far lacking stronger bullish signal.
Extended consolidation could be likely scenario as weekly indicators turned south after emerging from overbought territory and show plenty of space at the downside.
In addition, oil is on track for strong weekly bearish close (the second straight week in red and the biggest one week loss since early March 2017), which heavily weighs.
Broken 30SMA marks initial resistance at $60.90, with stronger upticks to be capped under previous pivotal support at $62.50 (broken Fibo 38.2% of $55.81/$66.64 rally).
Res: 60.90, 61.23, 62.07, 62.50
Sup: 60.26, 60.00, 59.51, 59.02
