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Crude Oil Breakout of Ascending Triangle Pattern - EIA Report In Highlights! 

EagleFX

The WTI crude oil prices are trading with a bearish bias over 41.30 level amid COVID19 increased number of cases. While the remainder of the world proceeds to cope with boost demand restoration in fits and starts, China has been a critical determinant in boosting oil prices, because China has violated the crude oil import records. Across the preceding few months, historic Chinese crude oil imports have supported still weak global oil demand and infused faith in the market that the demand improvement will continue. This is one of the reasons that oil prices are holding despite an increase in COVID19 cases.

Japan announced the usage of dexamethasone in an attempt to offer a variety of cures to the pandemic after earlier passing Gilead's redelivery for Covid use. However, the vaccine news suggests that the antidote to the epidemic is nearby, which favored the risk sentiment. There are approximately 16 other vaccines that are in the progress of clinical trials in Australia, France, Germany, India, South Korea, the U.K., the U.S., and China.

Moreover, the reason behind the upbeat market sentiment could also be associated with the hopes for a fiscal package in the U.S. It should be noted that the U.S. Treasury Secretary Steve Mnuchin said that policymakers are progressing on the phase 4 stimulus; thus, the deal is expected by the end of the July month. This news signaled an increase in the oil demand from the world's largest economy, namely America.

As in result, the broad-based U.S. dollar failed to gain any positive traction and edged lower on the day. However, the losses in the U.S. dollar could be attributed to the uptick in the U.S. stock futures. The losses in the U.S.Dollar kept the oil prices higher as oil prices are inversely related to the price of the U.S. dollar. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies slipped 0.03% to 95.090 by 9:41 AM ET (2:41 AM GMT). However, the surge in the pandemic data from the U.S., Australia, and Tokyo and the expectations of further worries, favor the energy bears.

On the negative side, the losses in the crude oil prices were further bolstered by the reports that RBC markets announced Joe Biden's win in the U.S. elections, which has the numbers at present, could pave the way for increased Iranian oil supply. This could result in extra worries for the oil traders.

Talking about the worsening relation among the world's top two economies got any additional pace after the U.S. Justice Department accused China on Tuesday of sponsoring hackers targeting labs developing COVID-19 vaccines on Tuesday. Lastly, the early-gain in the oil prices could be associated with optimism about the gradual reopening of the economy in China, which has fuelled hopes of a pick-up in demand for oil.


Daily Support and Resistance

S1 38.46

S2 40.06

S3 40.81

Pivot Point 41.66

R1 42.41

R2 43.26

R3 44.86

Later today, the eyes will remain on the EIA Crude Oil Inventories report, which is expected to come out during the U.S. session. The WTI crude oil prices are likely to find immediate support at 41.35 level. Closing of candles above this level can drive more buying in the WIT prices. On the higher side, crude oil can find resistance at 42.25 level, and above this, the next resistance stays at 43.95. The RSI is also in the bullish zone; therefore, we should keep an eye on 41.35 level to take buying above and selling below this level today. Good luck!

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