Fundamental Overview
Crude oil basically erased the entire rally first triggered by the Iranian missile attack against Israel in the first days of October. We are now back to square one as the market awaits the key catalysts in the next few weeks.
In the big picture, central bank easing generally leads the manufacturing cycle, so we can expect global growth to pick up and support the crude oil market. One risk that might be weighing on the market is the US elections as a Trump victory might be bearish due to increased supply expectations.
In 2016, crude oil did fall initially on the Trump victory but eventually rallied for more than 20% in the following three months on higher global growth expectations. So, it’s going to be a tricky one, but global growth should eventually prevail.
Crude Oil Technical Analysis – Daily Timeframe
On the daily chart, we can see that crude oil is testing a key barrier around the 71.67 level where the price got rejected from several times in the past months. The buyers will want to see the price breaking higher to start targeting the 77 handle next, while the sellers will likely step in here with a defined risk above the level to position for new lows.
Crude Oil Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a minor upward trendline defining the current bullish momentum. The buyers will likely keep on leaning on it to position for further upside, while the sellers will look for a break lower to increase the bearish bets into the 65 handle.
Crude Oil Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more clearly the recent price action. There’s not much to add here as the buyers will look for a break higher to position for a rally into the 77 handle, while the sellers will want to see the price breaking lower to increase the bearish bets into the 65 handle. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have the US Jobless Claims and the US Flash PMIs.
