FundamentalOverview

Crude oil rebounded fromthe lows as the buyers might be looking forward to the Fed’s easing cycle. As areminder, the positioning in crude oil is at record lows and the sentiment isvery 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.

Yesterday, we got the USIndustrial Production data and as expected the hurricane related drop inJuly was erased.

Crude OilTechnical Analysis – Daily Timeframe

On the daily chart, we cansee that crude oil rejected the key 71.67 resistanceas the sellers stepped in to position for a drop back into the 65 handle. The buyerswill need the price to break above the resistance to start targeting the major trendlinearound the 76 handle.

Crude Oil TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that once the price broke above the minor downward trendline the buyerspiled in for a rally into the resistance. There’s not much else we can gleanfrom this timeframe, so we need to zoom in to see some more details.

Crude Oil TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, we cansee that we have a strong support zone around the 68.50 level where the pricegot rejected from several times in the past weeks. This is where we can expectthe buyers to step in with a defined risk below the support to position for arally into the 76 handle.

The sellers, on the otherhand, will want to see the price breaking lower to increase the bearish betsinto the 65 handle. The red lines define the average daily range for today.

UpcomingCatalysts

Today, we have the FOMC Rate Decision and tomorrow, we get the latest USJobless Claims figures.