Fundamental Overview
Crude oil managed to eventually break above the key $80 resistance as the market has finally started to catch up to positive drivers. In fact, we got the recent OPEC+'s extension of voluntary output cuts, and we are seeing a pickup in economic activity as the US PMIs showed once again last Friday.
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. 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 managed to break above the key resistance around the 80 level and consolidated ever since. The buyers will keep on piling in around these levels with a defined risk below to position for a rally into the 84.50 level next.
The sellers, on the other hand, will want to see the price falling back below the 80 zone to regain some control and target a drop into the 77 level.
Crude Oil Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly the consolidation right above the key resistance now turned support. We had a very strong run from the lows around the 72.50 level, so a little bit of consolidation is normal.
There’s not much else we can glean from this chart as the buyers will keep leaning on the support zone while the sellers will wait for a break lower to pile in with more conviction.
Crude Oil Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a range between the 80 support and the 81.80 resistance. For now, the market participants will likely keep “playing the range” but a breakout on either side should see the momentum picking up steam. The red lines define the average daily range for today.
Upcoming Catalysts
Tomorrow we get the latest US Jobless Claims figures, while on Friday we conclude the week with the US PCE.
