Oil prices dropped $1 a barrel on Monday as investors await the outcome of the Federal Reserve policy meeting and China's manufacturing data and the market is cautious due to concerns about an economic slowdown that could impact fuel demand. Despite the ongoing conflict in the Middle East, oil prices retreated as concerns over the potential for Israel’s ground offensive in the Gaza Strip to escalate into wider conflict eased.
On the technical side the price is trading in the dynamic area between the 50 and 100 day moving averages while the Stochastic oscillator is near its extreme oversold level. Currently the price is testing the support of the 100 day moving average and in combination with the oversold Stochastic it is possible to see a bounce to the upside in the near short term. If this is confirmed then the first area of technical resistance could potentially be faced around the $85 price area which consists of the psychological resistance of the round number and the 38.2% of the weekly Fibonacci retracement level.
On the technical side the price is trading in the dynamic area between the 50 and 100 day moving averages while the Stochastic oscillator is near its extreme oversold level. Currently the price is testing the support of the 100 day moving average and in combination with the oversold Stochastic it is possible to see a bounce to the upside in the near short term. If this is confirmed then the first area of technical resistance could potentially be faced around the $85 price area which consists of the psychological resistance of the round number and the 38.2% of the weekly Fibonacci retracement level.