Oil Price Analysis, Price and Charts
- Positive US-China trade talks likely to see oil test next level of resistance.
- Bullish golden cross formation about to be made.
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US-China Trade Optimism Needs Confirmation For Oil to Fully Crack Resistance
US President Donald Trump lit the fuse to another round of risk-on optimism yesterday when he tweeted that the US and China were very close to a ‘BIG DEAL’, adding, ‘they want it, and so do we!’ It was reported that the US may roll back of US tariffs scheduled for December 15 while China would agree to buy USD50 billion of US agricultural goods in 2020. As always, nothing yet agreed but with just two days to go before the mid-December tariffs, the chances of the two global superpowers agreeing to downgrade the 18-month trade dispute are increasing.
The daily crude oil price chart remains positive with a series of higher highs and higher lows being made off the October 3 low print at $50.94/bbl. Horizontal resistance is nearing at $60.98 off the two highs in mid-July, prints that preceded a sharp 15%+ sell-off. One bullish technical indicator – the 50/200-dma golden cross – is close to forming and while this may not give oil an immediate boost, it does underscore the positive sentiment in the oil complex. To the downside, a pair of recent highs, a low and the uptrend form a cluster around the $58.70/bbl. level, before $58.00/bbl (20-dma) and $56.90/bbl. (golden cross) come into view.
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