Fundamental Overview
Crude oil has been rallying steadily since the breakout of the range as the improving US manufacturing activity and the tougher US sanctions on Russian crude triggered a 12% squeeze in a heavily shorted market.
The focus now switched to Trump as he’s expected to sign executive orders on energy and potential declaring national emergency to boost domestic production and reverse Biden’s policies on climate change.
Crude Oil Technical Analysis – Daily Timeframe
On the daily chart, we can see that crude oil eventually reached the key 80.00 handle where the price got rejected from as the sellers stepped in to position for a drop back into the 72.00
support. The price is now consolidating around the major broken
trendline.
The buyers will likely keep on piling in around these levels to position for a move above the 80.00 handle, while the sellers will look for a break lower to increase the bearish bets into new lows.
Crude Oil Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have now an upward trendline defining the bullish momentum on this timeframe. From a risk management perspective, the buyers will have a better risk to reward setup around the trendline to position for further upside. The sellers, on the other hand, will look for a break lower to increase the bearish bets into new lows.
Crude Oil Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a strong support zone around the 77.00 level where the price got rejected from several times in the past days. This is where the buyers are piling in to position for a rally into new highs, while the sellers are looking for a break lower to target a drop into the trendline and then a break below it. The red lines define the
average daily range for today.
Upcoming Catalysts
This week is pretty empty on the data front with just a couple of key releases scheduled for the latter part of the week. Today, we have the Trump’s Inauguration as the 47th US President. On Thursday, we get the latest US Jobless Claims figures, while on Friday we conclude with the Flash US PMIs.
This article was written by Giuseppe Dellamotta at
www.forexlive.com.
