Crude Oil continues to be
supported amid a confluence of positive supply and demand drivers although the
strong momentum of the past couple of weeks faded a bit ahead of the key $80
level. On the supply side, the tensions in the Red Sea are still present and overall,
there’s still a high geopolitical risk in the Middle East.
On the demand side, the
recent economic data has been showing a strong reacceleration in activity which
is supported by the rate cuts expectations and the end of the tightening cycle.
Moreover, China finally started to take more decisive actions with the PBoC surprising
with a bigger than expected RRR cut and yesterday with the biggest 5-year LPR cut ever.
WTI Crude Oil Technical
Analysis – Daily Timeframe
WTI Crude Oil Daily
On the daily chart, we can see that Crude Oil lost
some momentum recently ahead of the key $80 resistance. That’s
where we can expect the sellers to step in with a defined risk above the
resistance to position for a drop back into the trendline. The
buyers, on the other hand, will want to see the price breaking higher to
invalidate the bearish setup and extend the rally into the $83 level.
WTI Crude Oil Technical
Analysis – 4 hour Timeframe
WTI Crude Oil 4 hour
On the 4 hour chart, we can see that we got a
pullback recently into the most recent swing low at $75.57 where the buyers
stepped in with a tight risk below the level to position for a breakout of the
$80 resistance. Despite the PBoC rate cut, the price fell yesterday, so the
market might be waiting for other catalysts to break the key resistance.
WTI Crude Oil Technical
Analysis – 1 hour Timeframe
WTI Crude Oil 1 hour
On the 1 hour chart, we can see more
closely the recent price action with the price now contained between the $76.70
support and the $77.60 resistance. We can see that the sellers stepped in
around the resistance where we had also the red 21 moving average for confluence. The
buyers, on the other hand, will want to see the price breaking higher to
position for a rally into the $80 resistance targeting a breakout.
Upcoming Events
Today we have the FOMC Meeting Minutes on the agenda
while tomorrow we will see the latest US Jobless Claims figures and US PMIs.
Weak data is likely to weigh on Crude Oil in the short term while strong
figures should give it a boost.
See the video below