Growth outlooks in China and Europe continue to weigh on crude oil prices as well as geopolitical tensions and recent attacks on oil facilities in Russia. The disruption of global trade has tightened crude markets and led to a perception of tighter supply for prompt delivery, reflected in the widening premium of the first-month Brent contract to the six-month contract. Important data this week affecting the US Dollar , the core PCE specifically, is expected to give a glimpse on how the greenback could be affected in the short term and also the instruments traded against it. The Federal Reserve is closely monitoring the PCE readings and is one of the main gauges of the economy in their action plan regarding the monetary policy.
On the technical side the price is trading at a rather significant area on the chart since it is the support level of the 50 day moving average and also just below the 23.6% of the daily Fibonacci retracement level. The triangle formation that is in effect since early December of last year seems to be coming to an end and is important to monitor any potential breakout in the near short term outlook. The area of the $74 proved to be sufficient resistance to the price more than 4 times in the recent sessions so it is likely to see another rejection in the coming days and possibly the price moving downwards. If this becomes reality then the first area of possible support might be found around the $70 price area which consists of the psychological support of the round number as well as the lower boundary of the triangle formation.
On the technical side the price is trading at a rather significant area on the chart since it is the support level of the 50 day moving average and also just below the 23.6% of the daily Fibonacci retracement level. The triangle formation that is in effect since early December of last year seems to be coming to an end and is important to monitor any potential breakout in the near short term outlook. The area of the $74 proved to be sufficient resistance to the price more than 4 times in the recent sessions so it is likely to see another rejection in the coming days and possibly the price moving downwards. If this becomes reality then the first area of possible support might be found around the $70 price area which consists of the psychological support of the round number as well as the lower boundary of the triangle formation.