Fundamental Overview
Crude oil extended the gains after breaking above the key $80 resistance as the market eventually caught up to the positive drivers. In fact, we got the OPEC+'s extension of voluntary output cuts, and we’ve been seeing a pickup in economic activity.
We have also some major central banks beginning to ease their policies and China will likely continue to do so as deflationary forces remain present. All else being equal, this should support the demand outlook in the big picture.
Crude Oil Technical Analysis – Daily Timeframe
On the daily chart, we can see that crude oil broke through the key resistance around the 80 level and after some consolidation, extended the gains as the buyers piled in more aggressively. The first target should be the 84.50 level where we might get a rejection and possibly a pullback as the sellers will likely step in with a defined risk above the level to position for a drop back into the 80 level.
Crude Oil Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a minor trendline now defining the current bullish momentum. If we get a pullback, the buyers will likely lean on it to position for a break above the 84.50 level with a better risk to reward setup. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 80 level.
Crude Oil Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the recent price action with the rally yesterday following the US ISM Manufacturing PMI. That was a headscratcher as the data came out on the softer side.
Nonetheless, the buyers might want to wait for a pullback before increasing their positions, while the sellers will want to lean on the 84.50 resistance and increase the bearish bets on key downside breaks. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have the US Job Openings and Fed Chair Powell speaking. Tomorrow, we get the US ADP, the US Jobless Claims, the US ISM Services PMI and the FOMC Meeting Minutes. Thursday is going to be a US Holiday for Independence Day. Finally, on Friday, we conclude the week with the US NFP report.
