- Stochastics are coiled and a potential break-out to test 61.80 is on the cards.
- WTI is currently trading at $63.71bbls between a range of 63.68 and $64.59bbls.
- Bullish Fundamentals balance out the bearish technical arrangement, with price recently supported by Chinese upside data surprises and U.S. crude supplies falling by 1.4 million barrels for the week ended April 12.
The price of oil was supported early on Wednesday when data from overnight showed that China’s economy expanded by 6.4% over a year earlier in the three months ending in March, beating analysts’ expectations of 6.3% but matching the previous quarter for the weakest growth since 2009. Then, the Energy Information Administration, (EIA), on Wednesday reported that U.S. crude supplies fell by 1.4 million barrels for the week ending April 12.
This is all bullish for the near-term, especially in an environment whereby the US and China are on the brink of a breakthrough with respect to the trade spat saga.
“China’s data green-shoots are removing a major impediment to the crude rally, rendering it more sustainable as OPEC’s continued support remains in the driver’s seat,”
analysts at TD Securities explained.
Then, on the surface, the renewed fighting in Libya and sanctions on Venezuela and the approaching expiration of U.S. waivers for importers of Iranian oil are giving the market a bullish backdrop.
WTI levels
Stochastics stay bearish while in an oversold territory. Bears looking for daily closes below the 61.8% Fibo. A break of 8th April’s low opens the case for 61.80 and then the 200-D SMA – (61.20). The 100 4HR SMA at 61 the figure to negate the upside bias which then brings in the rising wedge’s support line as a target. A break of the support line and below $57.80 opens the case for a continuation of the bear trend that would target below the $42 handle and late Dec lows.
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