- WTI bounces off $39.83, the lowest in one week, to battle 50% Fibonacci retracement.
- EIA inventories recovered from -3.818M prior, -1.021M forecast.
- 61.8% Fibonacci retracement, 200-day EMA stand tall to challenge the oil bulls.
WTI retraces the biggest losses in three weeks while taking rounds to $40.10 during early Thursday morning in Asia. The energy benchmark dropped the lowest since October 15 the previous day before taking a U-turn from 100-day EMA.
While following its repeated pattern to reverse from 100-day EMA, established since early October, the black gold confronts 50% Fibonacci retracement of its August 27 to September 08 downside.
Considering the normal RSI conditions and the oil prices’ usual pullback from the key EMA, WTI buyers can overcome the immediate upside barrier near $40.15 to challenge the late-September high of $40.88.
However, any more upside beyond $40.88 will have to cross the 61.8% Fibonacci retracement level of $41.00 and 200-day EMA, currently around $41.30, to convince the WTI bulls.
Meanwhile, a daily closing below the 100-day EMA level of $39.83 will have the scope to return from 38.2% Fibonacci retracement level near $39.25, failing to which can direct bears to $38.70 and the monthly low around $36.80.
WTI daily chart
Trend: Pullback expected
Credit: FX Street