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Crude Stalls At Support
The sell-off in crude prices has stalled over recent days as traders await fresh directional cues. Weak global manufacturing readings set the tone at the start of the week with crude prices softening in response to fresh industrial data declines in the eurozone and US. Given the similarly weak readings we’ve had from China in recent months, demand concerns have risen, creating bearish sentiment in oil markets. Uncertainty around the US elections campaign is also driving crude prices. Fears of a Trump-driven supply drive have added to bearish sentiment over the last week given how precariously the market is balanced at the moment.
Fresh EIA Drawdown Seen
Better growth readings for Q3 yesterday seemed to assuage some of the concerns over US economic health leading to a rebound higher in crude prices. Additionally, news of a further drawdown in US commercial crude stores, reported by the EIA on Wednesday has also helped shore up sentiment for now.
US Inflation Due
Looking ahead, focus will now shift to today’s US inflation data with core PCE due this afternoon. If we see any fresh weakness in this data, this should once again bolster near-term Fed easing expectations, leading USD lower and allowing crude room to recover. Expectations for dovish signals from the Fed at the FOMC next week are also expected to feed into better support for crude in the coming weeks.
Technical Views
Crude
The sell off in crude from the failed retest of the broken bull channel has seen price reversing lower into the 77.64 level. Price is holding here for now and while this support holds focus is on a fresh push higher and a further challenge of the 82.59 level. To the downside, if we break current support, 72.61 will be the next support to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.