FxWirePro: US Oil breaks below trend line support, good to sell on rallies

Ichimoku Analysis (4-Hour chart)

Tenken-Sen- $41.96

Kijun-Sen- $42.60

WTI crude oil continues to trade lower for 3rd consecutive days on weak US economic data. The slight slump in the ADP employment report has decreased hopes of V-Shaped recovery. According to EIA, the inventory dropped by 9 million barrels compared to -2.0 M. It hits an intraday low of $40.21 and is currently trading around $40.61.

Technically, the commodity is trading well below trend line support and 200- day MA. This confirms further weakness and a dip till $38.71/$37.90 likely.

The pair is facing strong resistance at $42, a significant break above targets $42.40/$43. Significant buying only above $43.75.

It is good to sell on rallies around $40.75-80 with SL around $41.75 for the TP of $38.71/$37.90.