Oil Prices benefited from weak US Flash Manufacturing PMI figures at 49.9, technically contraction territory, reviving hopes of a US rate cut. The next FOMC meeting is on May 2 with the primary concern remaining to be persistent inflation pressures. Note as well the numbers actually imply that demand for oil could further weaken before cyclical patterns would see an uptick with the US driving season this summer.
Resistance:
- 89.98 Minor – Minor: Friday spike high
- 88.20/34 – Moderate: 20D Moving Average / prior range play floor
- 87.53 – Minor: Tuesday High
Support
- 86.84 – Minor: Intraday consolidation ceiling
- 85.93 – Minor: Intraday consolidation floor
- 85.12/15 – Moderate: 50D moving average / Monday Low
Immediate risk is for a follow through to Tuesday’s bounce given the flash PMI catalyst in combination with Monday’s dragon fly doji. Any upside will likely be limited to the 88.20/34 the 20D Moving Average and prior range play floor. Look for long wicks in hourly charts as we approach said price point as an excuse for shorts. A break of Tuesday’s highs may also be seen as an entry for bulls targeting the previous range play floor.
