Fundamental Overview
Crude oil has been on the backfoot ever since the last US NFP report as the market might have started to question the reasons to push into even higher highs. Things got even murkier as Trump’s odds of winning soared after the failed assassination attempt.
He is a great supporter of the “drill, baby, drill” slogan and he will likely put an end to the war in Ukraine if he gets elected. Those should be bearish drivers for crude oil as expectations of increased supply amid a slowing but growing economy might give the buyers a hard time.
On the other hand, we have the Fed that is about to cut rates into a resilient economy, which should be a positive driver for demand. The technicals might help here as a bounce on the key support zone should lead to higher prices, while a breakout to the downside would spell trouble for the market.
Crude Oil Technical Analysis – Daily Timeframe
On the daily chart, we can see that crude oil pulled back from the 84.50 resistance all the way to the key 80 support zone. This is where we can expect the buyers to step in with a defined risk below the zone to position for a rally into the 87.50 level. The sellers, on the other hand, will want to see the price breaking below the 80 support to increase the bearish bets into the 77 level next.
Crude Oil Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a strong support zone around the 80 level where we can also find the 38.2% Fibonacci retracement level for confluence. There’s not much else to add here as the buyers will look to buy from this zone, while the sellers will want to see a breakout to the downside to increase the bearish bets.
Crude Oil Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the most recent lower high stands around the 81.30 level. This is the level the buyers will want to see breaking to gain even more confidence and pile in for a rally into the trendline around the 83 level. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have Fed’s Waller speaking while tomorrow we conclude with the latest US Jobless Claims figures.