Crude Oil has been feeling the pressure from central banks raising interest rates pretty fast this year and it reversed down in June, falling to $70 l
Crude Oil has been feeling the pressure from central banks raising interest rates pretty fast this year and it reversed down in June, falling to $70 lows about two weeks ago. Central banks are slowing down now and they have softened the rhetoric, which has helped the sentiment improve, although most markets remain uncertain as a deep global recession remains well on the cards.
Bloomberg released a poll of economists yesterday which showed that the odds of a recession have gone up to 70% from 65% in November. As the FED adds to the restrictive policy and raises the terminal rate, it pushes the market toward the recession scenario.
US WTI crude reversed higher but the surge stopped at the 100 SMA (green) on the H4 chart. The 50 SMA (yellow) turned into support for some time and now the price has pushed above the 100 SMA after the jump this week. Yesterday’s large drawdown in the EIA inventories helped crude Oil maintain the bullish momentum, while most other assets traded in a range.
The upside momentum in crude Oil picked up further pace since yesterday and the 20 SMA (gray) is acting as support on the H1 chart. The price bounced off that moving average earlier today in late Asian session but has returned back after the upward revision in the US Q3 GDP figures. So we decided to open a buy Oil signal at this moving average and we’re hoping for a bounce, since a better US economy means higher demand for Oil.
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