Fundamental
Overview
Crude oil has been
falling steadily since topping around the $87.50 level following the mutual
retaliations between Iran and Israel. The drop has been kind of a
head-scratcher though as there are global growth expectations amid China and
other major central banks policy easing, improving PMIs and OPEC+ extending the
voluntary production cuts until the end of the year.
The death of Iranian
President Raisi doesn’t change anything for the market as quoting the Supreme
Leader Ayatollah Ali Khamenei “there won’t be any disruption to the country’s
affairs”. In the big picture, crude oil is still trading in a 70-90 range, so
there’s nothing exciting going on, but in the short-term it should remain supported
unless there is a latent slowing down in demand.
Crude Oil Technical
Analysis – Daily Timeframe
Crude Oil Daily
On the daily
chart, we can see that crude oil probed below the trendline
several times but failed to extend the drop into new lows. The market got stuck
in a consolidation just beneath the key $80 level and we will likely need a
catalyst to get things going again.
Crude Oil
Technical Analysis – 4 hour Timeframe
Crude Oil 4 hour
On the 4 hour
chart, we can see more clearly the key resistance
zone around the $80 level and we can also see that we have a downward trendline
adding extra confluence
to the barrier. This is where the sellers keep stepping in with a defined risk
above the resistance to position for a drop into new lows. The buyers, on the
other hand, will need a breakout to the upside to start targeting an extension
to the $84.50 level next.
Crude Oil
Technical Analysis – 1 hour Timeframe
Crude Oil 1 hour
On the 1 hour
chart, we can see that the rangebound price action doesn’t offer much trading opportunities.
From a risk management perspective, the best spot for the sellers to enter
short positions is around the resistance, while the buyers might want to wait
for the support around the $77 level. Nevertheless, a breakout to the upside is
likely to increase the bullish momentum and trigger a rally into the $84.50
level.
Upcoming
Catalysts
This week is pretty empty on the data front with the only
highlight being the US PMIs on Thursday where weak data might weigh on crude
oil while strong figures could give it a boost.
