WTI broke $60.70/60 support-confluence as US-China trade deal becomes uncertain

• China retaliated to the US threat by dimming prospects on the much-awaited trade deal.
• Break of important support joins a fundamental catalyst to please the bears.

Having breached the 50-day and 200-day SMA support-confluence, WTI trades near the five-week low of $60.10 during early Monday.  

The energy benchmark slipped beneath important rest initially on the US President Donald Trump’s tweets that threatened to levy fresh tariffs on China.

The low downturn became fierce after the US journalist tweeted that China’s Vice Premier Liu He has canceled his trip to Washington in response to recent actions from President Trump.

The US and China were earlier closer to a deal and Chinese delegation of lawmakers was to visit Washington to give the final touch to the much-awaited trade deal between the world’s two largest economies.

However, President Trump blamed the speed of progress and China’s renegotiation tactics to fire the gun on Sunday.

Adding to the black gold’s weakness could be an increase in the US crude oil rig counts by 2 to 807 for the week ended on May 03.

Given the fresh challenges to previously certain trade deal (that could have pleased energy buyers), join the break of important support, bears gain extra power.

Technical Analysis

FXStreet Analyst Ross J. Burland expects $57.89 to appear on the chart backed by the price-dip beneath the golden cross:

Should the price continue to deteriorate below the Golden Cross, the price could drop by at least the height of the wedge (measured at the base where the two trendlines start) which is around $10.80 for a target of $52.00 (at weekly 200 MA/ 50 pips above Feb lows). However, the first target comes in at 57.89 although stochastics are no clearer either for determining where the price is heading;  The monthly indicator leans bullish, weekly bearish and daily also leans bullish.

Also Read: WTI Technical Analysis: Bears on top, ducking blow Golden Cross, targets 57.80s