The OPEC+ production cuts and the expectations of more economic stimulus in China following the dismal inflation numbers, gave Crude Oil enough strength to break above the key resistance zone around the $75 level. After a brief rally, the price stalled and reversed as the PBoC held off from delivering more rate cuts. On Monday though, China has promised more stimulus, giving another boost to Crude Oil prices with the $83 resistance now in sight.
WTI Crude Oil Technical Analysis – Daily Timeframe
On the daily chart, we can see after getting rejected from the trendline on the first try of a breakout, Crude Oil bounced on the $75 resistance turned support and started to rally again to try again a breakout. Thanks to the news of more China stimulus, the price managed to sustain the breakout and extended the rally into the $80 level. The buyers are now eyeing the key $83 resistance where we should find strong sellers waiting there.
WTI Crude Oil Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that if we were to get a pullback, the buyers can lean on the upward trendline where we can also find the 38.2% Fibonacci retracement level and the red 21 moving average. The sellers, on the other hand, will want to see the price breaking below the trendline to start piling in and target the $75 support.
WTI Crude Oil Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a divergence with the MACD which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, the buyers may lean on the last swing low level at $78.31 with a tight risk below the level and target the $83 resistance.
Upcoming Events
The data to watch for Crude Oil this week will be the US Jobless Claims tomorrow. Data more or less in line with expectations shouldn’t cause any notable market move, but big deviation from the expected numbers can have a meaningful impact. In fact, a big miss may weigh on Crude Oil prices as the market may get some recessionary fears. On the other hand, a big beat should give Crude Oil a boost as the resilience in the labour market supports the demand.
