FundamentalOverview

Crude oil is finallyfinding some footing this week as the dip-buyers might be looking forward tothe Fed’s easing cycle. As a reminder, the positioning in crude oil is at arecord 13 years low and the sentiment is very bearish.

These factors can generallyoffer great contrarian opportunities. The main reason which could drive oilprices higher is the imminent Fed’s easing into a resilient economy. Lowerrates generally lead to an increase in the manufacturing activity and thereforeincreased demand for crude oil.

Moreover, the recent debatebetween Trump and Harris might have also decreased the risk premium of highersupply as Harris chances of winning the election according to betting marketsincreased. This is just a marginal thing, but it could give the buyers a bitmore confidence.

Crude OilTechnical Analysis – Daily Timeframe

On the daily chart, we cansee that crude oil recently broke through the 67.68 low and extended the dropinto the 65.31 level before reversing. The target should now be the resistancearound the 71.67 level.

That’s where we can expectthe sellers to step in with a defined risk above the resistance to position fora drop into the 64 support zone. The buyers, on the other hand, will want tosee the price breaking higher to increase the bullish bets into the major trendline.

Crude Oil TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that the price recently broke above the minor downward trendline that was defining the bearish momentum.The buyers started to pile in more aggressively and with the break above themost recent lower high at 69.05 level, the short-term trend should haveswitched to an uptrend.

Crude Oil TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, we cansee more clearly the recent price action and the break above the 69.05 levelyesterday. We got a bit of a consolidation around the level, but the bullishmomentum seems to be increasing.

We now have a minor upwardtrendline defining the bullish momentum and we can expect the buyers to keepleaning on it. The sellers, on the other hand, will want to see the pricebreaking below the trendline and the 69 handle to position for a drop back intothe lows. The red lines define the average daily range for today.

UpcomingCatalysts

Today we conclude the week with the University of Michigan Consumer Sentimentreport which is expected to print at 68.0 vs. 67.9 last month.