WTI erases early gains, eyeing $43.00 mark

Earlier on Friday during Asian trade, WTI oil future gained momentum led by weakness in USD just to erase all of its early gains and is currently trading around $43.35 level.

WTI reverses from 2016 highs on strong USD

On Thursday, future reached its highest level in 2016 before it reversed from $44.46 and turn negative to test $43.00 mark. The sudden turnaround was led by a rally in USD, which got a boost from Euro weakness on dovish comment by ECB President Mario Draghi.

Technical levels to watch

WTI future has reversed from an important resistance near $44.30-40 area, representing 61.8% Fibonacci expansion level of 27.73-42.46 up-move and subsequent retracement.

From current levels, weakness below $43.30 level is likely to drag it back towards $42.50-40 area. The $42.50-40 level represents 200-day SMA and had been acting as strong resistance, during its up-move in Mar. and April. Hence, previous strong resistance break-point might now act as immediate strong resistance and limit any further downside pressure on prices.

On the upside, $44.00 round figure mark now seems to act as immediate resistance. This is followed by resistance near $44.20-40 region, which was a key support held during the month of Sept. 2015. A clear break-through this important resistance is likely to trigger a fresh leg of up-move for the commodity in the near-term.