Fundamental Overview
Crude oil has been ranging for months between the 67.00 support and the 72.00 resistance as the market continued to weigh the future scenarios.
On one hand, we had the Trump’s victory which might have been seen as bearish for fear of the tariffs and a slowdown in global growth as other countries would likely retaliate. Moreover, there was also a potential increase in supply and the geopolitical risk premium easing with the Trump’s administration as negative reasons.
On the other hand, we had the increase in global growth expectations due to the global central bank easing, the Trump’s pro-growth policies and the Chinese officials promising much more on the monetary and fiscal policy side.
The economic data has been pointing to a reacceleration in activity which might continue further without tightening in financial conditions. That led to an upside breakout in crude oil with the bullish momentum likely to increase in the next months.
Crude Oil Technical Analysis – Daily Timeframe
On the daily chart, we can see that crude oil broke out above the resistance around the 72.00 handle. The buyers piled in for a rally into the next key technical level around the major trendline. That’s where we can expect the sellers to step in with a defined risk above the trendline to position for a drop back into the 72.00 level.
Crude Oil Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have an upward trendline defining the current bullish momentum. The buyers will likely continue to lean on it to position for further upside, while the sellers will look for a break lower to target a pullback into the 72.00 level.
Crude Oil Technical Analysis – 1 hour Timeframe
On the 1 hour chart, there’s not much else we can add here as the buyers will look for a bounce on the trendline, while the sellers will look for a break lower. The red lines define the average daily range for today.
Upcoming Catalysts
Today, we have Fed’s Waller speaking, the US ADP and the FOMC Minutes. Tomorrow, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP report.
