Fundamental
Overview
Crude oil opened the day
with a positive gap today following the weekend news of OPEC+ delaying the December
production hike.
In the big picture, central
bank easing generally leads the manufacturing cycle, so we can expect global
growth to pick up and support the crude oil market. One risk that might be
weighing on the market is the US election as a Trump victory might be bearish
due to increased supply expectations.
It’s worth remembering that
in 2016, crude oil did fall initially on Trump’s victory but eventually rallied
for more than 20% in the following three months on higher global growth
expectations.
In case we get a red sweep,
the market will likely focus on global growth with Trump’s tax cuts. In case we
get Trump and a divided Congress, we can expect him to focus majorly on tariffs
and that could dent global growth and put some pressure on the market.
With Harris as President and a divided Congress we should see crude oil gaining as she needs a legislative action to raise taxes and has a
lighter stance on tariffs. A blue sweep could still be bullish but with a lesser degree.
Crude Oil
Technical Analysis – Daily Timeframe
Crude Oil Daily
On the daily chart, we can
see that crude oil is now back at the key 71.67 resistance following the OPEC+ production hike
delay. The buyers will want to see the price breaking higher to increase the
bullish bets into the 77.60 level next. The sellers, on the other hand, will
likely lean on the resistance to position for a drop into the 65 handle.
Crude Oil Technical
Analysis – 4 hour Timeframe
Crude Oil 4 hour
On the 4 hour chart, we can
see that we have a minor upward trendline defining the current bullish
momentum. The buyers will likely keep on leaning on it to keep bidding the
price up, while the sellers will want to see the price breaking lower to
increase the bearish bets into the 65 handle.
Crude Oil Technical
Analysis – 1 hour Timeframe
Crude Oil 1 hour
On the 1 hour chart, we can
see the gap higher today following the weekend news with the price now near the
key resistance. There’s not much to add here as the buyers will look for a
break higher, while the sellers will step in to position for a drop into new
lows. The red lines define the average daily range for today.
Upcoming
Catalysts
Tomorrow we have the US ISM Services PMI and the US Presidential Election. On
Thursday, we have the US Jobless Claims and the FOMC Policy Decision. On
Friday, we conclude the week with the University of Michigan Consumer Sentiment
report.