Crude on Watch
Oil prices are on watch this week following the move higher in crude futures on Friday which saw the market piercing above the 63.83 level resistance. Price is now testing the bear channel highs and with momentum studies turning more bullish, focus is on a continuation higher and a fuller breakout. Weaker China data overnight has seen bullish momentum stalling for now with exports seen weaker and both CPI and PPI remaining in negative territory. Exports were seen at their weakest level in three months, putting focus back on the growing impact of the US trade war, particularly given the lack of progress in US/China trade talks recently.
US/China Trade Talks
Looking ahead, however, there are some signs of hope on the US/China trade front. Following a call between Trump and Xi last week, which was said to get negotiations back on track, negotiators from both sides are due to meet in London today to recommence trade discussions. If we hear positive headlines on the back of these talks, this could help further lift oil prices this week.
Russia/Ukraine Uncertainty
Away from US/China trade talks, oil prices are also being lifted by ongoing uncertainty around escalating violence between Russia and Ukraine. With both sides stepping up drone attacks and missile strikes, the prospect of an end to the conflict in the near-term looks weak, which should continue to underpin oil prices for now.
Technical Views
Crude
The rally in crude has seen the market breaking above the 63.83 level with price now testing the bear channel highs. Momentum studies are supportive, putting focus on an upside break while price holds above 63.83, targeting a test of 67.45 next. To the downside, 57.42 remains key support to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.