Crude Oil Prices Slip Over Supply Concerns – Potential Trade Idea
WTI crude oil prices slipped after three consecutive days of gains, due to depressed economic growth concerns. West Texas Intermediate (WTI) crude was down 35 cents, or 0.6%, at $55.88. The US benchmark rose 0.5% in the previous session and was on track for a weekly gain of 4%.
It should be noted that the strong weekly bullish trend in crude oil prices was supported by the unexpected decline in the United States’ crude stockpiles and certainty about more efforts to support prices by OPEC and its partners.
As we know, Thursday’s crude oil price recovery was inspired by data showing that US inventories dropped by 1.7 million barrels last week, shattering analysts’ expectations for an increase of 2.2 million barrels.
At the Sino-US trade front, a survey by Reuters revealed that the recent break in the United States and China trade war is not an economic turning point and didn’t decrease the chances that the United States could drop into the recession in the coming years.
Daily Support and Resistance
S3 53.82
S2 54.91
S1 55.5
Pivot Point 56.01
R1 56.59
R2 57.1
R3 58.19
WTI Crude Oil – Forex Trading Signal
On the 2 hour timeframe, crude oil has entered the overbought zone, suggesting chances of bearish retracement. WTI crude oil is facing immediate resistance at 56.55 area along with an immediate support level of 55.85.
Crude oil has chances to go for bearish retracement until 55.75, which marks the 23.6% retracement level, and below this, US oil may drop further until 55.40, the 38.2% Fibo level. The idea is to open a sell position on the violation of 55.85 level today. The bearish target remains 55.40 and 55.05.
Good luck!
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