FUNDAMENTAL
OVERVIEW
Crude oil prices came under
some pressure in the final part of last week as we got a couple of bearish
catalysts. On the US-Iran negotiations front, there have been many mixed signals,
but it looks like the Iranians are willing to compromise given the bleak
consequences that a no-deal could have.
In fact, the US is said to
be prepared to sustain weeks-long operations against Iran if needed. Given the
uncertainty, it shouldn’t be surprising to see a rangebound price action in the
crude oil market. Tomorrow, we have the second round of talks in Geneva, so watch
out for market-moving headlines.
On the OPEC+ front, we got
a report
on Friday saying that some nations see scope to resume oil output hikes in
April, although a decision hasn’t been made yet and talks will continue ahead of
the March 1 meeting.
CRUDE OIL
TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that crude oil is consolidating between the 66.43 and 62.35 levels as
negotiations between US and Iran continue. There’s not much we can glean from
this timeframe, so we need to zoom in to see some more details.
CRUDE OIL TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can
see the price broke below the upward trendline which could either signal a reversal
or just a more complex pullback. For now, the price is consolidating at the
62.35 support as the buyers continue to step in to keep pushing into new highs.
The sellers will want to see the price breaking lower to extend the drop into
the 61.14 level next.
CRUDE OIL TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we can
see more clearly the rangebound price action at the 62.35 support. We have a
strong resistance zone around the 63.30 level where we can also find the confluence
with the downward trendline defining the bearish momentum. The sellers will
likely continue to lean on the trendline with a defined risk above the resistance
to target a break below the 62.35 support, while the buyers will look for a
break higher to increase the bullish bets into the 66.00 handle next. The red
lines define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow we have the second round of US-Iran nuclear talks in Geneva. On
Wednesday, we have the FOMC Meeting Minutes. On Thursday, we get the latest US
Jobless Claims figures. On Friday, we conclude the week with the US Q4 GDP, the
US PCE price index for December, the US Flash PMIs and a potential US Supreme
Court decision on Trump’s tariffs.
This article was written by Giuseppe Dellamotta at investinglive.com.