Oil Rises to 5-Month, Holding Steady above $44.00 Mark

Oil Rises to 5-Month, Holding Steady above $44.00 Mark

21 April 2016, 13:34
Roberto Jacobs
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Oil Rises to 5-Month, Holding Steady above $44.00 Mark

On Wednesday, crude oil future broke through a very strong resistance near 42.45-50 area, coinciding with the very important 200-day SMA, after the official US crude inventories data showed domestic production falls for sixth consecutive week.

Oil future all set for a fresh break-out

Oil future is currently trading near $44.20 level, which was a key support held during the month of Sept. 2015. The current historic support turned resistance area also represents 61.8% Fibonacci expansion level of 27.73-42.46 up-move and subsequent retracement. Hence, a clear break-through this important resistance is likely to trigger a fresh leg of up-move in the near-term.

On a sustained trade above this immediate resistance, oil future could immediately dart towards $45.00 handle, ahead of $45.35-40 horizontal resistance.

On the downside, weakness below $44.00 round figure mark seems to find support near $43.30 region. Even if the commodity fails to hold this immediate support, any further downfall now seems to be restricted at an important resistance break-point, now turned strong support near $42.50-40 region.


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