Basic Overview
Crude oil remains supported as buyers may be looking at the implications of the Fed’s easing cycle on economic activity. As a reminder, crude oil positions are at all-time lows and sentiment is very bearish.
These factors can generally provide great opportunities for reversal. The main reason that could push oil prices higher is the Fed easing its flexible economic policies. Lower interest rates usually lead to increased manufacturing activity and thus increased demand for crude oil.
On Monday, we will get the S&P Global PMIs, and this will be the first test although the data may not include the Fed decision, so the ISM Manufacturing PMI for the first week of October may be a better gauge.
Crude Oil Technical Analysis – Daily Time Frame
Crude oil daily
On the daily chart, we can see that crude oil rejected the key resistance level of 71.67 but eventually came back to test it again. Buyers will need the price to break the resistance level to start targeting the key trend line around the 76 level. On the other hand, sellers are likely to step in again with risks defined above the resistance level to set a bearish position towards the 65 level.
Crude Oil Technical Analysis – 4 Hour Time Frame
Crude oil 4 hours
On the 4-hour chart, we can more clearly see the recent rejection from resistance and bounce to the support area around the 68.50 level. There is not much we can deduce from this time frame, so we need to zoom in to see more details.
Crude Oil Technical Analysis – 1 Hour Time Frame
Crude oil for an hour
On the 1-hour chart, we can see that we have a small uptrend line that defines the current bullish momentum in this time frame. If we get a pullback in the trend line, we can expect buyers to rely on it to place a suitable position to rise towards the main trend line.
On the other hand, sellers will want to see the price drop to a lower level to increase bearish bets to the 65 level. The red lines mark the average daily range for the day.