Oil off day’s low but still in red at $48.50

Extending its decline for third consecutive day and after an initial dip to the vicinity of $48.00 handle, WTI crude oil has managed to recover from session low to currently trade around the mid-$48.00s.

The black gold started its corrective move after climbing to a nearly one-year high level of $51.64 in the previous week as jittery global financial markets boosted the safe-haven demand for the greenback, which eventually dented demand for dollar-denominated commodities, like oil. 

Moreover, traders seem to have turned cautious over the sustainability of the commodity's sharp appreciation, in excess of 80% from a multi-year low level of $27.55 touched in Jan., ahead of the much awaited this week's Fed meeting, which would determine the near-term direction for the greenback and eventually determine the near-term momentum.

Technical levels to watch

On the immediate downside, $48.00 round figure mark seems to extend immediate support. A follow through selling pressure below $48.00 immediate support now seems to drag the commodity below $47.75-70 intermediate support and extend the downslide further towards testing a previous strong resistance, now turned strong support, near $47.00 handle.

On the flip side, the pair needs to regain momentum back above $49.00 handle before confirming the resumption of prior appreciating move. Above $49.00 handle, the black gold seems all set to break past $49.65-70 resistance, before heading back above $50.00 psychological mark, towards retesting $50.40 resistance area.