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WTI Crude Oil Enters Overbought Zone - Fibonacci Retracement! 

EagleFX

On Wednesday, the WTI crude oil climbed towards $46 a barrel near the highest since March, boosted by U.S. producers locking most of their offshore Gulf of Mexico output ahead of Hurricane Laura and a statement revealing a decline in U.S. crude inventories.

Elsewhere, the gains in the oil prices could also be associated with the previous day report that suggested the U.K. government's funding for the University of Cambridge's COVID-19 vaccine trials, which eventually exerted a positive impact on the market's risk-tone sentiment.

Despite the combination of supporting factors, the oil traders failed to cheer them properly, possibly due to the world's first COVID-19 reinfection in Hong Kong. As we already mentioned in the previous report that the man in his 30s was re-infected with coronavirus 4-months after his initial infection as per the University of Hong Kong (HKU) report. Apart from this, the on-going rising cases in Europe and Asia also capped further upside in the crude oil prices.

The coronavirus cases increased to 236,429, with a total of 9,280 deaths, as per the German disease and epidemic control center, Robert Koch Institute (RKI) report. In the meantime, the cases were raised by 1,576 in Germany on Tuesday against Monday's +1278. Whereas the death toll also increased by 3.

The U.S. Dollar remained in demand on Tuesday amid mixed sentiment. However, the greenback's bullish momentum could be short-lived as U.S. economic recovery doubts still persist in the market. Whereas, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies rose 0.05% to 93.062 by 10:15 PM ET (3:15 AM GMT).

Traders are keenly awaiting the weekly stockpiles' official readings by the Energy Information Administration (EIA), which will be watched closely. Predictions suggest that the EIA Crude Oil Stocks Change will be -3.833M versus -1.632M before the week ending on August 21.


Daily Support and Resistance

S1 41.28

S2 41.93

S3 42.23

Pivot Point 42.58

R1 42.88

R2 43.23

R3 43.88

Crude oil traded sharply bullish to trade at 43.52 level, but now it has entered the overbought zone, and it may drive bearish correction in the market. On the lower side, the WTI crude oil may find immediate support at 43.27 level and resistance at 43.522. Violation of 43.27 support can extend selling until 38.2% Fibonacci retracement level of 43.12. Good luck!

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