WTI OIL – renewed upside momentum encounters strong resistance at the base of the thick daily cloud
WTI oil extended gains for the second consecutive session, supported by renewed supply concerns and a larger-than-expected draw in US crude inventories (API report showed -3.82 mln bbls vs -3.64 mln bbls previous week).
Prices advanced more than 3% over the past two days, following the formation of a Morning Doji Star reversal pattern on the daily chart.
Bulls cleared significant barriers at $64.27/37 (Fibo 61.8% of $66.01/$61.46 and Sep 16 recovery peak), though further upside is likely to encounter strong resistance from the base of the thick daily Ichimoku cloud at $64.62. Technical outlook on the daily chart remains mixed, with improving momentum offset by a 55/100DMA bear cross and pressure from the cloud.
Two scenarios remain in focus:
- Failure to close above the recent range top at $64.37 would keep prices trapped within the range, though slightly tilted to the upside as long as they hold above the $63.40 zone. This scenario currently looks more probable, given the weight of the daily cloud.
- A sustained break above the range top and penetration into the daily cloud would generate stronger bullish signals, suggesting continuation of the recovery and the potential formation of a higher base around $61.50.
Res: 64.62; 64.94; 65.10; 66.01
Sup: 63.73; 63.40; 63.00; 62.53
