Fundamental Overview
The fundamentals in the crude oil market haven’t changed much in the past month. In fact, crude oil remains confined in a range between the 72.00 resistance and the 67.00 support as the market continues to weigh the future scenarios.
On one hand, we have the Trump’s victory which might be seen as bearish for fear of the tariffs and a slowdown in global growth as other countries could retaliate. You can throw there also a potential increase in supply and the geopolitical risk premium easing with the Trump’s administration.
On the other hand, we might have an increase in global growth expectations due to the global central bank easing and the Trump’s pro-growth policies. We’ve been seeing early signs of this with the latest US data reaccelerating.
Crude Oil Technical Analysis – Daily Timeframe
On the daily chart, we can see that crude oil continues to trade in a range between the resistance around the 72.00 handle and the support around the 67.00 handle. The buyers will want to see the price breaking higher to increase the bullish bets into the 78.00 handle next, while the sellers will look for a break lower to extend the drop into the 65.00 handle.
Crude Oil Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price recently broke above the middle of the range around the 69.50 level which acts as kind of a barometer for the short term sentiment. The buyers piled in on a break higher and will now target a rally into the top of the range. The sellers will need to see the price falling back below the 69.50 level to position for a drop into the 67.00 support.
Crude Oil Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more clearly the recent price action with the rally from the lows likely helped by strong US ISM Manufacturing PMI data and the positioning into an OPEC+ output cut extension.
If we get a pullback into the 69.50 zone, we can expect the buyers to pile in for a rally into the 72.00 resistance, while the sellers will look for a break lower to target the lows. The red lines define the average daily range for today.
Upcoming Catalysts
Today, we have the US ADP, the US ISM Services PMI and Fed Chair Powell speaking. Tomorrow, we get the latest US Jobless Claims figures. Finally, on Friday, we conclude the week with the US NFP report.
