WTI Erases Early Gains, Eyeing $43.00 Mark
Earlier on Friday during Asian trade, WTI oil future gained momentum led
by weakness in USD just to erase all of its early gains and is
currently trading around $43.35 level.
WTI reverses from 2016 highs on strong USD
On
Thursday, future reached its highest level in 2016 before it reversed
from $44.46 and turn negative to test $43.00 mark. The sudden turnaround
was led by a rally in USD, which got a boost from Euro weakness on
dovish comment by ECB President Mario Draghi.
Technical levels to watch
WTI
future has reversed from an important resistance near $44.30-40 area,
representing 61.8% Fibonacci expansion level of 27.73-42.46 up-move and
subsequent retracement.
From current levels, weakness below
$43.30 level is likely to drag it back towards $42.50-40 area. The
$42.50-40 level represents 200-day SMA and had been acting as strong
resistance, during its up-move in Mar. and April. Hence, previous strong
resistance break-point might now act as immediate strong resistance and
limit any further downside pressure on prices.
On the upside,
$44.00 round figure mark now seems to act as immediate resistance. This
is followed by resistance near $44.20-40 region, which was a key support
held during the month of Sept. 2015. A clear break-through this
important resistance is likely to trigger a fresh leg of up-move for the
commodity in the near-term.
