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Fundamental
Overview
It’s been a brutal month
for crude oil as renewed growth fears pushed the market into new lows. The
negative supply news from Libya
and Iraq,
and the delay by OPEC+ to increase production from October
didn’t help much to slow down the bearish momentum.
The markets have been
waiting for the US NFP to get some more clarity on the labour market
but instead we got a mixed report with some better details under the hood. That
should be good news at the margin as the Fed is still going to ease policy into
a resilient economy.
The positioning in crude
oil is at a record 13 years low and a contrarian would see this as an
opportunity to go against the consensus with the Fed’s easing likely spurring
activity in the manufacturing sector and increasing demand.
Crude Oil
Technical Analysis – Daily Timeframe
Crude Oil Daily
On the daily chart, we can
see that crude oil sold off all the way down to the 67.68 low where it consolidated
since last Friday. This is where we can expect the buyers to step in with a
defined risk below the level to position for a pullback into the 71.67 level.
The sellers, on the other hand, will want to see the price breaking lower to
increase the bearish bets into the 64 support
zone.
Crude Oil Technical
Analysis – 4 hour Timeframe
Crude Oil 4 hour
On the 4 hour chart, we can
see that we have a downward trendline defining the bearish momentum. We
can expect the sellers to keep leaning on the trendline to position for further
downside, while the buyers will want to see the price breaking higher to
increase the bullish bets into the 71.67 resistance.
Crude Oil Technical
Analysis – 1 hour Timeframe
Crude Oil 1 hour
On the 1 hour chart, we can
see that we now have a tight range between the 67.60 support and the 69.00
resistance. The buyers will want to see the price breaking higher to position
for a rally into the 71.67 resistance, while the sellers will look for a break
lower to increase the bearish bets into new lows. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we have the US Small Business Optimism Index. Tomorrow, we get the US
CPI report. On Thursday, we have the latest US Jobless Claims figures and the
US PPI data. On Friday, we conclude the week with the University of Michigan
Consumer Sentiment report.