Oil Loses Steam, Drops to Session Low on Profit Taking
WTI crude oil is extending its profit taking move from nearly one-year high level of $51.64 and is currently trading near session low.
A sudden bout of buying interest in the greenback seems to exert downward pressure on the black gold. Moreover, traders might be inclined to take some profits off the table after the commodity's relentless gains in excess of 80% from a multi-year low level of %27.55 touched in January this year.
Earlier during the day, the commodity cruised to a fresh 2016 highs on the back of supportive data released on Wednesday indicating strong Chinese import data and falling US crude inventories.
The bulls, however, took a breather on Thursday as traders now turn skeptic over the sustainability of the ongoing bullish momentum. Moreover, investors also turn cautious and await for fresh signals from next week's FOMC meeting over the timing of next Fed rate-hike move, which might dent demand for dollar-denominated commodities like oil.
Technical levels to watch
From current levels, weakness below $50.50 could get extended and drag the commodity back below $50.00 handle to test $49.75-70 support region. Below $49.75-70 support zone, the black gold is likely to aim back towards $49.00 level support.
On the flip side, resumption of the near-term bullish momentum is likely to confront immediate resistance near yearly high level of $51.60-65 zone. A convincing break through session peak now seems to pave way for further near-term up-move towards its next major resistance near $52.50 level.