Fundamental
Overview
Crude oil has been ranging
for months between the 67.00 support and the 72.00 resistance as the market
continued to weigh the future scenarios.
On one hand, we had the
Trump’s victory which might have been seen as bearish for fear of the tariffs
and a slowdown in global growth as other countries would likely retaliate. Moreover,
there was also a potential increase in supply and the geopolitical risk premium
easing with the Trump’s administration as negative reasons.
On the other hand, we had
the increase in global growth expectations due to the global central bank
easing, the Trump’s pro-growth policies and the Chinese officials promising
much more on the monetary and fiscal policy side.
The economic data has been
pointing to a reacceleration in activity which might continue further without
tightening in financial conditions. That led to an upside breakout in crude oil
with the bullish momentum likely to increase in the next months.
Crude Oil
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that crude oil broke out above the resistance around the 72.00 handle. The buyers
piled in for a rally into the next key technical level around the major trendline.
That’s where we can expect the sellers to step in with a defined risk above the
trendline to position for a drop back into the 72.00 level.
Crude Oil Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that we have an upward trendline defining the current bullish momentum. The
buyers will likely continue to lean on it to position for further upside, while
the sellers will look for a break lower to target a pullback into the 72.00
level.
Crude Oil Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, there’s
not much else we can add here as the buyers will look for a bounce on the
trendline, while the sellers will look for a break lower. The red lines define
the average daily range for today.
Upcoming
Catalysts
Today, we have Fed’s Waller speaking, the US ADP and the FOMC Minutes. Tomorrow,
we get the latest US Jobless Claims figures. On Friday, we conclude the week
with the US NFP report.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
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