Oil predictably extended a decline that was to a large extent facilitated by the news on resumption of operation of oil wells and ports in Libya. ADX indicator also demonstrates bearish trending pressure. Thus shortly we can expect testing of the support zone 36.40-36.84. And in case it gets broken the market may switch to a full-fledged downward rally. However the answer to this question lies beyond this day.
We note a local dynamic support at the lower Bollinger band (37.14), which undergoes sellers’ pressure. This suggests a high probability of a break and further decline of the quotes.
On the hourly chart a flat dynamic prevails that may let the market have a breather in the lower Bollinger bands range (38.40-39.15).
Main scenario: Extension of decline in direction 36.40-36.85.
Alternative scenario: Flat in the 38.40-39.15 range.
Shorts from 39.15 to 38.40, 36.85, 36.40.