Fundamental Overview
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 in the short term for fear of the tariffs and a slowdown in global growth as other countries could retaliate, and an increase in supply.
On the other hand, the red sweep should see Trump focusing more on tax cuts and domestic issues first which should eventually lift global growth expectations. If we had a divided Congress, then his first priority could have been indeed a trade war.
Moreover, we have also central banks easing their monetary policies and that generally leads the manufacturing cycle, which is likely to be supportive for the crude oil market.
More recently, we got the news that OPEC+ could further extend its voluntary output cuts at the December meeting and another better US Manufacturing PMI which contributed to the bullish sentiment in the past few days.
Crude Oil Technical Analysis – Daily Timeframe
On the daily chart, we can see that crude oil is approaching the top of the range between the resistance around the 72.00 handle and the support around the 67.00 handle. The focus will now be on the potential breakout.
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 likely step in around the resistance to position for a drop back into the 67.00 support.
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 acted as kind of a barometer for the short term sentiment. The buyers piled in on a break higher to extend the rally into the top of the range. The sellers will need to see the price breaking below it to increase the bearish bets into the bottom of the range.
Crude Oil Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have an upward trendline now defining the current bullish momentum. If we were to get a pullback, the buyers will likely lean on it to position for the breakout of the range. The sellers, on the other hand, will look for a break below the trendline and the 69.50 zone to target a drop into the 67.00 support. The red lines define the average daily range for today.
Upcoming Catalysts
Tomorrow we have the US Consumer Confidence report and the FOMC Meeting Minutes. On Wednesday, we get the US PCE report and the latest US Jobless Claims figures.
