Crude oil prices ended lower with a sharp drop last Friday, triggered by comments of a Saudi prince which dimmed the chance of the agreement of production freezing.
It is known that Saudi Arabia is willing to freeze its production only if Iran and other oil producing countries do the same thing. Mohammad bin Salman, the Deputy of the Crown Prince of Saudi Arabia affirmed that in an interview with Bloomberg.
Oil price remains under pressure in short-term outlook, hit the level of 36.16 which is served as intraday key support. We can see that the price is pulling up and approaching the Fibonacci resistance area at 37.25-37.92. Note that 20 MA and 50 MA are falling on hourly chart and the price currently is moving between those MA’s.
At the same time, hourly stochastic and CCI are overbought. So today we have at least two trading strategies. First, watch for bearish signal confirmation when the price is still between 20 MA and 50 MA the intraday key support at 36.16 as the target. If the price managed to break below the support, oil price possibly will keep sliding towards 35.38-34.73.
As alternative scenario, we can watch for bearish signal confirmation on a pull-back move to within the Fibonacci resistance area at 37.25-37.92 with target at 36.83 or 36.16 in extension. Be careful if the resistance at 37.92 breaks because it may turn the intraday bias to bullish and possibly will push oil price up to 38.40 or 39.01.