Crude Oil continues to be supported amid a confluence of positive supply and demand drivers although the strong momentum of the past couple of weeks faded a bit ahead of the key $80 level. On the supply side, the tensions in the Red Sea are still present and overall, there’s still a high geopolitical risk in the Middle East.
On the demand side, the recent economic data has been showing a strong reacceleration in activity which is supported by the rate cuts expectations and the end of the tightening cycle. Moreover, China finally started to take more decisive actions with the PBoC surprising with a bigger than expected RRR cut and yesterday with the biggest 5-year LPR cut ever.
WTI Crude Oil Technical Analysis – Daily Timeframe
On the daily chart, we can see that Crude Oil lost some momentum recently ahead of the key $80 resistance. That’s where we can expect the sellers to step in with a defined risk above the resistance to position for a drop back into the trendline. The buyers, on the other hand, will want to see the price breaking higher to invalidate the bearish setup and extend the rally into the $83 level.
WTI Crude Oil Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we got a pullback recently into the most recent swing low at $75.57 where the buyers stepped in with a tight risk below the level to position for a breakout of the $80 resistance. Despite the PBoC rate cut, the price fell yesterday, so the market might be waiting for other catalysts to break the key resistance.
WTI Crude Oil Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the recent price action with the price now contained between the $76.70 support and the $77.60 resistance. We can see that the sellers stepped in around the resistance where we had also the red 21 moving average for confluence. The buyers, on the other hand, will want to see the price breaking higher to position for a rally into the $80 resistance targeting a breakout.
Upcoming Events
Today we have the FOMC Meeting Minutes on the agenda while tomorrow we will see the latest US Jobless Claims figures and US PMIs. Weak data is likely to weigh on Crude Oil in the short term while strong figures should give it a boost.
See the video below
