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.