As mentioned yesterday, the negative supply side
news in the past weeks, have been faded over and over again in a sign
that the market has factored that in and it’s now looking through
it.
The
thing to watch is the demand side now. We’ve been in a global easing
cycle for some time now, we have the Trump’s tax cuts and deregulations
ahead and the trade war looks now a thing of the past as expectations
for positive outcomes remain the base case.
These are all positive
drivers for global growth and therefore for crude oil. The overstretched bearish positioning in the crude oil market is also a factor that could lead to a quick squeeze into new highs as things keep on improving.
WTI crude oil 1 hour chart
On the 1 hour chart, we can see that the price broke above the key resistance zone around the $64 price area and the major downward trendline. This should have opened the door for a move into the $72 level. We now have an upward trendline defining the bullish momentum. If we get a pullback into the trendline, we can expect the buyers to lean on it to position for further upside, while the sellers will look for a break lower to extend the pullback into the $62 level next.
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