Oil recovers and rises above $46.00

By FXStreet FXStreet (Córdoba) – Oil prices rallied this Tuesday, with West Texas Intermediate crude futures advancing to a fresh weekly high of $46.39 a barrel, erasing all of its Monday’s losses.

The commodity began the day with a tepid tone, as Chinese Trade Balance figures showed a sharp contraction in the country’s imports, spurring concerns over further demand reduction worldwide. There was no fundamental catalyst behind the intraday recovery, which adds to the case of a technical bottom underway in the mid-term.

Oil technical view

“Technically, the daily chart shows that the Momentum indicator has extended to fresh highs in overbought levels, and maintains its upward slope, whilst the RSI indicator heads higher around 53 as the price holds a mild bullish 20 SMA, all of which supports additional gains for this Wednesday”, said Valeria Bednarik, chief analyst at FXStreet. “Shorter term, the 4 hours chart shows that the price is struggling to recover ground above its 20 SMA, whilst the technical indicators aim higher around their mid-lines, not yet confirming a new leg north. Should the price accelerate beyond the mentioned daily high, the upward momentum will be firmer, supporting an advance towards 47.20 in the short term”.

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Source:: FX Street