Crude oil has been performing well in the market since hitting a low point in early June. Factors like OPEC’s extension of output cuts, global economic activity, and potential central bank policy changes have all contributed to a positive outlook for future demand. However, a recent soft US NFP report caused the price to drop after hitting a key resistance level.
Looking at the daily chart, crude oil was rejected at the 84.50 resistance level and continued to drop after the weak NFP report. Buyers may find a better risk to reward setup around the 80 support zone, while sellers will be looking for a break below 80 to increase bearish bets towards the 77 level.
On the 4-hour chart, the price fell below a minor trendline, indicating a shift in momentum with sellers in control. The 38.2% Fibonacci retracement level at a key support level has been significant for the market.
Zooming in on the 1-hour chart, there is resistance around the 82.70 level, where sellers may step in with a defined risk above the resistance to target the 80 support level. Buyers, on the other hand, will aim for a break above the 84.50 resistance to regain control.
Upcoming catalysts include Fed Chair Powell’s testimony to Congress, US CPI and Jobless Claims figures on Thursday, and US PPI and University of Michigan Consumer Sentiment survey on Friday. Markets will closely watch for any hints on monetary policy changes after the recent NFP report.
Overall, the future of crude oil prices will depend on how the market reacts to the recent economic data and upcoming events. Investors will need to carefully monitor key support and resistance levels to make informed trading decisions.
