The WTI crude oil prices continue to flashing red and dropped below $42.00 level, mainly due to the worries that the global economic recovery could be stopped due to the second wave of coronavirus cases. The geopolitical tensions between the world's two biggest markets also weighed on the risk sentiment and contributed to the oil losses. In the meantime, the risk-off market sentiment further soured after US announcements of fresh punitive measures on Canada, which also add a burden on the oil prices.
Whereas, the American Senator's inability to agree over the much-awaited stimulus also exerted extra dullness on the market trading sentiment and contributed to the oil losses. Moreover, the broad-based US dollar strength, triggered by risk-off market sentiment, also played its negative role in the oil prices.
On the positive side, the biggest oil-producing members of the Organization of the Petroleum Exporting Countries and Allies (OPEC+) confirmed to fully commit to production cuts, which helped the crude oil prices to limit its deeper losses on the day. At the moment, crude oil is trading at $41.77 and consolidating in the range between 41.69 - 42.22.
At the US-China front, the rising tensions between the United States and China still gaining market attention, as the Dragon Nation clearly warned the United States that he would take revenge over banning the Chinese TikTok app. Whereas, the Republican leader signed an executive order to raise barriers for the US businesses connecting to China's TikTok and WeChat. However, these lingering Sino-US tensions could keep crude oil prices under pressure while heading into the weekend.
Across the pond, the Trump administration has decided to impose tariffs on Canada's aluminum to renew the trade war among the global majors. These gloomy updates add further burden on the market risk tone.
Apart from this, the fears of rising COVID-19 cases in the US, Australia, Japan, and some of the notable Asian nations continually fueling worries that the economic recovery could be halt. However, these fears were further boosted by the Federal Reserve's recent comments that the second wave of the virus slowed the economic recovery in the world's biggest economy. Whereas, the World Health Organization (WHO) President Dr. Tedros Adhanom Ghebreyesus also added fuel to the fire flames while saying that the perfect vaccine for the pandemic may never be found. This news also weighed on oil prices.
Daily Support and Resistance
Pivot Point 42.22
Crude oil is trading at $41.50, holding above the support level of 41.50, extended by an upward trendline. On the 4 hour timeframe, crude oil prices hold over 50 EMA, which suggests odds of buying, while the RSI value is also staying over 50 to support the buying trend. The WTI prices can find resistance at 43.46 along with support at 41.50 and
40.35. Let's look for buying over 41.50. Good luck!