Fundamental Overview
Tonight, the PBoC announced lots of easing measures ranging from short to long term interest rates. This was the catalyst for the copper rally. Things are looking better and better for the market as we’ve also got a 50 bps cut from the Fed last week.
Central bank easing generally leads the manufacturing cycle, so we can expect global growth to pick up. All these reasons should be bullish for the market and support prices in the next months.
Moreover, as a reminder, the positioning in crude oil is at record lows and the sentiment is very bearish. These factors can generally offer great contrarian opportunities.
Crude Oil Technical Analysis – Daily Timeframe
On the daily chart, we can see that crude oil is struggling to break above the key 71.67 resistance. The buyers will need the price to break above the resistance to start targeting the major trendline around the 76 handle. The sellers, on the other hand, will likely step in again with a defined risk above the resistance to position for a drop into the 65 handle.
Crude Oil Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we created a range between the 68.50 support and the 71.67 resistance. The bias remains skewed to the upside but until we get a breakout, the market participants will likely keep on playing the range.
Crude Oil Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see the choppy price action as the market continues to test the resistance. There’s not much else to add here as traders will wait for a breakout on either side to get things going. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have the US Consumer Confidence report. On Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US PCE.