Fundamental
Overview
The fundamentals in the crude
oil market haven’t changed much. The price action remains confined in a range
between the 72.00 resistance and the 67.00 support as the market continues to
weigh the future scenarios.
On one hand, we have the
Trump’s victory which might be seen as bearish for fear of the tariffs and a
slowdown in global growth as other countries could retaliate. You can throw
there also a potential increase in supply and the geopolitical risk premium
easing with the Trump’s administration.
On the other hand, we might
have an increase in global growth expectations due to the global central bank
easing, the Trump’s pro-growth policies and more recently the Chinese officials
promising much more on the monetary and fiscal policy side.
Crude Oil
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that crude oil continues to trade in a range between the resistance around the 72.00 handle and the
support around the 67.00 handle. The buyers will want to see the price breaking
higher to increase the bullish bets into the 78.00 handle next, while the
sellers will look for a break lower to extend the drop into the 63.00 price
area.
Crude Oil Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that price action inside the range has been a nightmare. It’s been all over
the place not giving any clear technical level where to lean on. The best
strategy here is to just sit on one’s hands and wait for a breakout or a strong
catalyst.
Crude Oil Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can
see that we have a minor support zone around the 69.20 level where the price
got rejected from several times in the past weeks. This might add as kind of a barometer
for the short-term sentiment with the price staying above the zone being more
bullish and below being more bearish. The red lines define the average daily range for today.
Upcoming
Catalysts
Today, we have the FOMC Policy Decision. Tomorrow, we get the latest US
Jobless Claims figures. On Friday, we conclude the week with the US PCE data.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
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