Will the rising tension in the Middle East boost Oil prices?
Macro theme:
- WTI hovered around 72.50 dollars per barrel on Thu, attempting to recover from previous losses as markets considered potential supply risks due to rising tensions in the Middle East.
- The Fed also implemented a larger-than-expected 0.5% cut, which could stimulate economic activity and boost oil demand.
- However, worries over China’s slowing economy and an expected supply increase from OPEC+ continue to pressure prices in the medium term.
Technical theme:
- From the 4-hour chart, USOIL is recovering and trading within its ascending channel. The price was retraced to retest both EMAs and bounced up to close above the key resistance at around 70.20.
- If the price can maintain above 70.20, it may continue to rise to 71.50. In the medium term, 73.00-73.80 is the potential area for USOIL to reach upon breaking 71.50, as it is the technical confluence area.
- Meanwhile, the price may retest the broken level 70.20 before resuming its upward short-term movement.
Analysis by: Dat Tong, Senior Financial Markets Strategist at Exness
- WTI hovered around 72.50 dollars per barrel on Thu, attempting to recover from previous losses as markets considered potential supply risks due to rising tensions in the Middle East.
- The Fed also implemented a larger-than-expected 0.5% cut, which could stimulate economic activity and boost oil demand.
- However, worries over China’s slowing economy and an expected supply increase from OPEC+ continue to pressure prices in the medium term.
Technical theme:
- From the 4-hour chart, USOIL is recovering and trading within its ascending channel. The price was retraced to retest both EMAs and bounced up to close above the key resistance at around 70.20.
- If the price can maintain above 70.20, it may continue to rise to 71.50. In the medium term, 73.00-73.80 is the potential area for USOIL to reach upon breaking 71.50, as it is the technical confluence area.
- Meanwhile, the price may retest the broken level 70.20 before resuming its upward short-term movement.
Analysis by: Dat Tong, Senior Financial Markets Strategist at Exness
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