This weekend, OPEC+ decided to increase production by more than expected in August and reports cited some unnamed members of the cartel saying the group will consider the boosted 548,000 barrels a day for September output once again at the next meeting.
A negative gap was of course expected, but the market erased the losses pretty quickly suggesting that the focus is elsewhere. The first supply hike triggered a selloff in prices but the following hikes had less and less effect on the market. The attention remains on global growth.
We still have positive growth expectations due to Fed rate cuts, Trump’s “big, beautiful bill” and further de-escalation in trade war, which are all positive drivers for demand.
In the bigger picture, the market might remain rangebound between the 60 and 90 levels, but the path of least resistance should remain to the upside unless those positive drivers get challenged.
On the 4 hour chart, we can see that the price continues to range just above the key support zone around the 64.00 level. We can expect the buyers to keep piling in around the support with a defined risk below it and target a move back into the 72.00 resistance. The sellers, on the other hand, will look for a break lower to extend the drop into the 60.00 level next.
This article was written by Giuseppe Dellamotta at www.forexlive.com.