FUNDAMENTAL
OVERVIEW
Oil prices have briefly fallen below pre-war levels
last week but eventually settled above the key 68.00 support zone.
The big unwinding should have run its course now and we
could see a prolonged consolidation around these levels. The situation in the
Strait of Hormuz is still murky but overall, there’s no real breakdown for now.
The next bearish driver could be the Fed if the US
data increases tightening risk. Next week, we get the US CPI report and that
could be a major catalyst. If we see an easing in inflationary
pressures, it could translate into a more dovish view on the Fed and keep the
downside in oil prices more limited on positive risk sentiment and demand
outlook.
Conversely, an upside surprise in the data will likely trigger another
hawkish repricing in interest rate expectations and put some more pressure on oil
prices.
CRUDE OIL
TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that crude oil fell briefly below the pre-war levels last week but couldn’t
extend the breakout. The price action has been mostly rangebound at the 68.00
support zone. The buyers continue to step in with a defined risk below the
support to position for a rally into the 78.00 resistance. The sellers, on the
other hand, are waiting for a downside breakout to increase the bearish bets
into the 55.00 level next.
CRUDE OIL TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, it
looks like the price is bottoming out at the support. We have a minor downward
trendline defining the bearish structure. We can expect the sellers to lean on
the trendline with a defined risk above it to keep pushing into new lows, while
the buyers will look for break to extend the pullback into the 73.00 level
next.
CRUDE OIL TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we
have a minor upward trendline defining the current pullback. We can expect the
buyers to lean on the trendline with a defined risk below it to keep pushing into
new highs, while the sellers will look for a break to pile in for a drop into
new lows. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow, we have the FOMC
meeting minutes. On Thursday, we get the latest US Jobless Claims figures.
This article was written by Giuseppe Dellamotta at investinglive.com.
