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Crude Oil Continues to Exhahibt Choppy Sessions - Uncertanioty Prevails! 


The WTI crude oil prices looking directionless despite decreasing the U.S. inventory report. The crude oil prices were mostly unchanged on the day near the $25.40. However, a bullish breakout of $27 level leads the oil prices towards the next resistance level of 27.82. The Commodity Futures Trading Commission warned that the odds of extra price volatility have increased as the expiry date of the June West Texas Intermediate contract nears.

The receding hopes of quick economic recovery and the US-China intensifying tension damaged the investor's confidence, resulting from a weaker tone around the equity markets. At the US-China front, the already intensified trade tussle between the United States and China got worse after U.S. President Trump recently blocked investments into the Chinese stocks. China fire shots by words on the United States, which eventually weighed on the market risk sentiment. In the meantime, the U.S. stocks dropped after the Federal Reserve's Powell signaled that the economy could face further downturn if Congress fails to provide additional financial support, which eventually keeps the oil prices under pressure.

On the other hand, the OPEC also shared the negative story about the world oil demand in its monthly report on Wednesday. The organization now expects demand to drop by 9.07 million BPD this year, compared to its expected contraction of 6.85 million BPD last month, which also keeps oil traders cautious.

Daily Support and Resistance

    • S1 22.23

    • S2 23.74

    • S3 24.66

Pivot Point 25.25

    • R1 26.16

    • R2 26.75

    • R3 28.26

The technical side of the U.S. oil is mostly unchanged as it continues to trade in between 27 - 25 area. The recent weakness in the U.S. dollar is finally supporting crude oil prices due to the dollar's negative correlation with commodities. The U.S. oil is consolidating at 26.96, having violated the symmetric triangle pattern, which provided resistance at 26.70 along with support at 25.10 and 24.10. The bullish breakout of 26.70 may lead to WTI prices towards 27.30 and even higher towards 27.80 during the U.S. session today. All the best!
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Source: https://www.eaglefx.com/news/crude-oil-continues-to-exhahibt-choppy-sessions-uncertanioty-prevails/
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