Though ending the week in the red, WTI managed to recuperate most of past week’s losses closing at $56.06. On one hand concerns about supply cuts and weak business sentiment (lagging US wage growth and lower than expected ISM manufacturing PMI) pressured oil prices, while a better than expected US jobs data and an upbeat in US China trade negotiations managed to lift WTI prices higher. Oil prices above $56 as risk on sentiment and a positive outlook on US China trade talks have outweighed concerns about a global downturn as seen by weak factory data across the US and China, and an ongoing supply growth.
WTI tested the lower band of our downtrend channel at $53.7, to bounce off and consolidate above the $54 level before breaching the upper band and both resistance levels. Our previous resistance at $55.85 has been confirmed as a support as bullish momentum builds up with $56.7 as our nearest target.
Support: 55.31/ 55.85
Resistance: 56.70/ 57.21