WTI Oil Outlook: Oil May Fall Further on Weakened Sentiment and Formation of Reversal Pattern

WTI oil trades within a choppy consolidation on Friday but remains biased lower following a massive losses on Thursday, when the price fell by 7.6%, making the biggest one day drop since 21 Apr 2020.

A new wave of coronavirus across Europe that resulted in fresh lockdowns, strongly hurt the sentiment and diminished hopes that global demand recovery will pick up.

Fresh weakness returned below psychological $ 60 level for the first time in over two weeks, broke below Fibo support at $ 59.85 (23.6% of $ 33.61/$ 67.95) and cracked a higher base at $ 59.00 zone, adding to bearish signal on completion of reversal signal on weekly chart, as WTI is on track for the biggest weekly loss since the mid-April.

Bearish dailies and weakening weekly studies warn of deeper correction, which could challenge key support at $ 57.02 (top of rising daily cloud) and extend towards $ 54.83 (Fibo 38.2% of $ 33.61/$ 67.95).

Weekly close below $ 60 to confirm fresh bearish stance.

Res: 60.00; 61.31; 61.81; 62.73.
Sup: 58.92; 58.29; 57.69; 57.02.