- US oil retreated from Friday highs at 74.43 and is currently trading at 73.24 levels.
- The pair opened this week's trade with a bearish gap, hit session lows at 72.61.
- Oil prices dropped on Trump's declaration of agreement from Saudi Arabia that production needs to increase.
- Trump's declaration was premature, markets still await clarification on whether or not Saudi Arabia could decide to abandon OPEC limits.
- Meanwhile, oil has retraced from lows and is currently trading above 73 handle.
- Technical indicators on daily charts support upside. Price has broken out of daily cloud.
- However, caution advised as Stochs have entered overbought zone and RSI has shown retrace from near overbought levels.
- We see major resistance at 73.85 (strong trendline). Any further upside only on break above.
- Immediate support lies at 5-DMA at 72.71. Decisive break below could see some weakness.
Support levels - 72.71 (5-DMA), 71.78 (1H 110-EMA)
Resistance levels - 73.85 (trendline), 74
