Crude oil prices have been on the rise after surpassing the crucial $80 resistance level, driven by various positive factors in the market. The decision by OPEC+ to extend voluntary output cuts, along with increasing economic activity and central banks easing their policies, has contributed to the bullish momentum. Additionally, China’s efforts to combat deflationary pressures are expected to support the overall demand outlook for crude oil.
Looking at the technical analysis of crude oil on different timeframes, on the daily chart, we can observe that crude oil successfully broke above the $80 level and continued to climb higher with strong buyer interest. The next target to watch for is the $84.50 level, where we might see some selling pressure and a possible pullback before potentially resuming the upward trend.
On the 4-hour chart, a minor trendline has emerged, indicating the current bullish momentum. In case of a retracement, buyers are likely to view it as an opportunity to enter long positions targeting a break above $84.50 with a favorable risk-reward setup. Conversely, sellers will be looking for a breakdown below this level to increase bearish bets towards $80.
Zooming in on the 1-hour chart, we can observe the recent price action following the US ISM Manufacturing PMI data release. Despite the softer data, buyers are still showing interest in the market. They may wait for a pullback to add to their positions, while sellers will be targeting the $84.50 resistance level to increase their bearish positions in case of key downside breaks. The red lines indicate the average daily range for the day.
Looking ahead, upcoming catalysts such as the US Job Openings data and a speech by Fed Chair Powell today, followed by the US ADP, Jobless Claims, ISM Services PMI, and FOMC Meeting Minutes tomorrow, will likely impact market sentiment. Thursday will be a US Holiday for Independence Day, and on Friday, the week will conclude with the US NFP report, which could provide further insights into the health of the economy and influence crude oil prices.
