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MTrading Team • 2024-06-03

Crude Oil bears attack key support despite OPEC+ verdict

Crude Oil bears attack key support despite OPEC+ verdict

WTI Crude Oil prints a four-day losing streak while falling to over a week’s low early Monday. In doing so, the black gold fails to justify the OPEC+ decision to extend the supply cut agreement toward the end of 2024 and gradually withdraw it in 2025. It’s worth noting, however, that a four-month-old horizontal support zone surrounding $76.20-75.80 will join the nearly oversold RSI (14) line to challenge the energy bears afterward. Should the commodity drop beneath the stated key support region, the $74.20 might act as an intermediate halt during a southward trajectory targeting February’s bottom of near $71.40-35.

Meanwhile, the Crude Oil recovery remains elusive unless the quote jumps back beyond the 61.8% Fibonacci retracement of February-April upside, near $77.60. Even so, a convergence of the 200-SMA and a two-month-old descending trend line, close to the $80.00 threshold, will be a tough nut to crack for buyers before taking control. In a case where the commodity prices remain firmer past $80.00, the odds of witnessing a gradual run-up toward the late April swing high, around $84.45, and then to the yearly peak of near $87.63, can’t be ruled out.

Overall, Crude Oil ignores the latest bullish catalyst to approach an important support as energy traders now focus on US PMIs and NFP data.

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