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