Trump-OPEC tweet fight and charts
WTI rally is struggling to rise above 58.10 for several days, likely because of rising US oil supplies and economic slowdown headlines – and most importantly after Trump’s tweet on Feb 25th. The price action looks like possible short-term bearish reversal.
Trump’s tweet is very symptomatic, indicating that he looks at current price level as close to unacceptable. However, OPEC is also defiant this time. Trump tweeted advising OPEC to “relax and take it easy” which send oil price in free fall. Saudi oil minister Khalid al-Falih replied: “We are taking it easy; 25 countries are taking a very slow and measured approach.”
Technically rally is not over yet and further impulse up is still possible, watch if price breaks above 58.10 resistance. But irrelevant to what Trump will do this time, somewhere around 59.30 there is a strong resistance area and price will likely to reverse from there.
I am therefore bearish on WTI. Start selling from current levels and scale into position around 59.50 and 61.00.
Strong supports are located at 56.80 and especially 55.10 – seems like price levels where the OPEC actions and comments might cause a bullish bounce.
Have a nice weekend,