Crude Oil Technical Analysis – Growth concerns remain in the spotlight | Forexlive

Fundamental
Overview

Crude oil has been under
some strong pressure lately as a mix of negative supply and demand drivers
weighed on the market.

In fact, on the supply
side, OPEC+ recently surprised announcing plans to increase production starting
in April. The timing of the move wasn’t good as the markets recently started to
worry about the demand side as growth fears grew amid weaker US data and a
selloff in the US stock markets.

The focus now switches to
the FOMC decision on Wednesday. The market is currently priced for roughly
three rate cuts by the end of the year following some weak US data in the past
weeks.

If the Fed revises the
expected cuts from two to three in 2025, we might get some relief rally in risk
assets and crude oil. Conversely, if the Fed remains resolute on the two rate
cuts, we might see some weakness in the risk sentiment (all else being equal).

Crude Oil
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that crude oil is testing the trendline around the 68.00 handle. This
is where we can expect the sellers to step in with a defined risk above the
trendline to position for a drop into the key 63 support zone targeting a break below it. The buyers,
on the other hand, will want to see the price breaking above the trendline to
pile in for a rally back into the 80.00 handle.

Crude Oil Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a strong resistance zone around the 68.00 handle where we have
the confluence with the trendline. The sellers
will look for a rejection here to keep pushing into new lows, while the buyers
will look for a break higher to regain some control. A break below the
counter-trendline should see the bearish momentum picking up as the sellers
will likely increase the bearish bets into new lows.

Crude Oil Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see more clearly the bearish setup around the 68.00 resistance zone. If we get
a pullback into the counter-trendline around the 67.00 handle, we can expect
the buyers to lean on the trendline to position for the break above the
resistance with a better risk to reward setup. The sellers, on the other hand,
will look for a break lower to increase the bearish bets into the 63.00 support
zone. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we get the US Retail Sales data. On
Wednesday, we have the FOMC Policy Decision. On Thursday, we get the US Jobless
Claims figures.