Crude Sales Pause… For Now
The sell off in oil has stalled for now into a test of support at the 71.61 area. A softer US Dollar on the back of yesterday’s FOMC is helping underpin crude for now, though risks remain skewed to the downside against a backdrop of elevated uncertainty around incoming Trump tariffs. This week we’ve seen a marked uptick in aggression in trump rhetoric on trade, as well as other issues. With traders now bracing for Trump to implement a slew of tariffs in coming days, oil prices are subject to a drop lower on a weakened demand outlook. The extent to which oil moves lower in response to incoming tariffs will of course depend on the scale and severity of any levies imposed.
China Tariffs in Focus
For oil prices, the main focus is on China. If Trump applies tariffs against China this should have big downside consequences for crude. On the other hand, if Trump delays taking action against China, we’re likely to see a near-term relief rally in crude. Indeed, a softer tone from Trump against China recently has fuelled some speculation that Trump will look to avoid tariffs or take weaker action against China which again should limit the downside impact on crude, if seen.
Technical Views
Crude
The sell off has stalled for now into a test of the 72.61 level support. While this area holds, focus is on a recovery and a fresh push higher with the bear channel highs and the 77.64 resistance the next objective for bulls. To the downside, 67.45 is next support to watch is we break lower.
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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.