WTI: Mildly bid above $39.00 amid Iranian concerns, risk reset

• WTI probes intraday high while extending pullback from $38.87.
• Blast in Tehran, US-Iran tension join upbeat comments from global policymakers.
• Coronavirus fears remain on the desk but hopes of vaccine counter pessimism.
• Baker Hughes US Rig Counts, qualitative catalysts in the spotlight.

WTI takes the bids around $39.30, up 0.65% on a day, during the pre-European session on Friday. The energy benchmark recently benefited from the headlines concerning Iran while also cheering the consolidation in the market sentiment. Though, fears of the coronavirus (COVID-19) and a light calendar keep the black gold’s upside restricted.

Be it the US-Iran tussle over the sanctions or the blast in the eastern Tehran, news from Iran offered early-day strength to the oil prices. The up-moves got additional strength after the risk-tone sentiment recovered following US President Donald Trump’s tweet defying calls of another shutdown and highlighting the vaccine launch in the year. Also favoring the risks were signals from the BOJ and New Zealand diplomats as well as Aussie PM’s stance on the surge in Victoria’s pandemic cases.

While portraying the mild risk-on mood, stocks in Asia and the US stock futures stay in green whereas the US 10-year Treasury yields seesaw around 0.68% as we write.

It should also be noted that the US dollar’s recent pullback also favors commodity prices. The US dollar index (DXY), a gauge of the greenback versus major currencies, stretches the U-turn from the four-day high to 97.35 by the press time.

Moving on, there are no major data in the European/UK session, which in turn might result in a dull day ahead of the US Open. During the American trading period, the Michigan Consumer Sentiment Index and Personal Income – Expenditure details might entertain the traders. Additionally, weekly reading of the Baker Hughes US Rig Counts, previous 189, also becomes the key considering the latest falls to record lows.

Technical analysis

Repeated pullbacks from 21-day EMA, currently around $37.35, favor the bulls targeting $40.00 and June 08 top surrounding $40.60. Meanwhile, 61.8% Fibonacci retracement of February-April downside, around $37.00, offers an extra challenge to the sellers below the 21-day EMA.