US crude oil pries fell on Monday because of profit taking after a rally last week brought the oil pice to the highest level in four and a half month.
Last week’s gain mostly was triggerd by geopolitics factor in Kuwait. The strike was expected to limit oil supply and the oil price will rise even though the Doha meeting came out disappointing because the major oil producers could not reach an agreement on production freezing. However, profit taking occurred ahead to the Fed’s monetary policy meeting which is expected to give clue about the US economy outlook.
The oil price currently is in consolidation mode, testing the Fibonacci support area at 43.25-42.49. Note that hourly stochasti has crossed down while CCI is falling from the overbought area; however, as long as the support at 42.49 remains intact, the intraday bias remains bullish. Therefore, watch for bullish signal confirmation on a pull-back move to within the Fibonacci support area as signal to go long with 43.71 as target and 44.46 in extension.
Be careful if the price managed to break the support at 42.49 because it will turn the intraday bias to bearish and possibly will be followed by a bearish move to 41.96-41.28.