Fundamental Overview
Last week, crude oil has been on a seesaw due to supply side factors as we got the news that Libya was going to close down all oil fields and halt production and exports, and then that Iraq was going to cut production.
On Friday, oil weakened again on the news that OPEC+ was going to proceed with the planned production hike in October. In the bigger picture, the market has been mostly rangebound for two years as central banks tightening weighed on growth.
Right now, it seems like the Fed is going to cut rates into a resilient economy which could spur economic activity. If they really manage to pull out a soft landing, it should support the crude oil market. On the other hand, if the data increases the expectations for a hard landing, we should see new lows ahead.
Watch out for the US ISM Manufacturing PMI release today as that will likely set the trend into NFP across all markets.
Crude Oil Technical Analysis – Daily Timeframe
On the daily chart, we can see that crude oil is now near the key 72.50 support. This is where we can expect the buyers to step back in with a defined risk below the support to position for a rally into the 80 handle. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 67.50 level next.
Crude Oil Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a strong trendline defining the bearish bias. If we bounce around these levels and get there, we can expect the sellers to lean on it with a defined risk above it to position for a break below the 72.50 support. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the 80 handle.
Crude Oil Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a nice resistance zone around the 74 handle. If we get a bounce around the support, the buyers will want to see the price breaking above the resistance to increase the bullish bets into the trendline. The sellers, on the other hand, will likely lean on it to position for a break below the support. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have the US ISM Manufacturing PMI. Tomorrow, we have the US Job Openings. On Thursday, we get the US Jobless Claims figures and the ISM Services PMI. Finally, on Friday, we conclude the week with the US NFP report.
