With the two regional, Ukraine and Israel-Gaza, not having much of an impact in the logistics chain for the moment, oil prices are about monetary policy and how it affects demand. Hopes for rate cuts have recently been dashed in both the UK and more importantly the US with persistent inflation pressures while China, the worlds biggest importer continue to see economic malaise on structural issues. Still the upcoming US driving season should underpin the market preventing a catastrophic sell-off.
Resistance
- 84.29 – Daily Consolidation Resistance
- 82.72 – Yesterday’s High
- 81.52 – Previous Consolidation Floor
Support
- 80.84 – Daily Consolidation Low
- 80.05 – Previous Consolidation Lows
- 79.34 – January Consolidation Resistance
Positioning of a candlestick tend to have dramatic impact on their interpretation. Yesterday’s long wick in Brent Crude had it been preceded by a bullish trend would have signaled a bearish reversal. However preceded by a modest drop inside a consolidation it becomes a suggest of bull waiting to pounce. For now we are one of those looking for Oil’s Range Play for the month to continue. Look for base building in hourly charts with subsequent long tails or bullish engulfing candles from the support to signal that its time to go long with stops under 79.34.
