FxWirePro: US Oil Declines on Oversupply Concerns, Good to Sell on Rallies

FxWirePro: US Oil Declines on Oversupply Concerns, Good to Sell on Rallies

23 May 2016, 12:08
Roberto Jacobs
0
17

FxWirePro: US Oil Declines on Oversupply Concerns, Good to Sell on Rallies

  • Pattern Formed – Shooting Star 
  • Major resistance- $49.35 (161.8% retracement of $46.79 and $42.90) 
  • US oil has declined after making a high of $49.27 on account of strong USD and firm global supply will continue to outpace demand. 
  • Supply disruption in North America and Africa have been largely responsible for recent spike in oil price. 
  • But number of rigs operated by U.S drillers was steady last week for the first time this year indicates abundant supply . 
  • Technically the commodity has facing strong resistance at $49.35 (161.8% retracement of $46.79 and $42.90) and any further bullishness only above that level. 
  • US oil has declined till $47.66 at the time of writing. It is currently trading around $47.83. 
  • On the higher side minor resistance is around $48 and break above targets $48.60/$49/$49.35. 
  • The major support is around $47 (10 day MA) and break below $46/$45.

It is good to sell on rallies around $48-$48.10 with SL around $49.35 for the TP of 46.70/$45

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