Oil prices pared losses in European session, after fell more than 5% in Asian session as the world’s top oil producers failed to reach agreement on the production freeze.
WTI currently is traded around $39.15/bbl, down almost 3% after hi the lower level at $37.6 at Asian session.
There was hope that the world’s top producer, including Saudi Arabia and Russia, to agree on the idea of freezing the output at the January level. Last February, Russia, Saudi Arabia, Qatar and Venezuela agreed to freeze the output if other producer do the same thing.
The market is now less optimistic about the output freeze after Iran decided not the take part in the meeting. Analysts said that the tension between Saudi and Iran was the main reason behind the disagreement along the oil producers.
The oil price has pulled back into the Fibonacci resistance area at 39.34-40.40. Note that 20 MA and 50 MA are still falling and the price currently is moving below the MAs.
Note that hourly stochastic and CCI are overbought. As today’s trading strategy, you can wait for bearish signal confirmation on within the Fibonacci resistance area as signal to go short with target at 38.68-37.61.
Be careful if the price managed to break above the resistance at 40.40 because it will turn the intraday bias to bullish and possibly will be followed by a bullish move up to 41.16-42.13.