Oil prices headed lower for a fifth day on continued downward momentum, failing to reverse Monday’s heavy losses. The 5-day losses have pulled prices below the Ichimoku cloud and the tenkan-sen line has crossed below the kijun-sen line. The medium-term outlook is therefore looking increasingly bearish.
Prices are likely to find support at 50.75, which is 61.8% of the Fibonacci retracement level of the upleg from the March 16 low of 42.84 to May 6 high of 63.59. The near-term bias is also bearish with RSI falling deeper below 50. However, it has now broken into oversold territory under 30 so a short-term rebound is possible. Resistance could come at the 28.2% of the Fibonacci retracement level at 55.60.
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