Crude oil price made a remarkable 7% advance this Monday as bulls retake the initiative following marked weakness on the US Dollar.
The greenback has been on the back foot after the US press projected Joe Biden as the president-elect of the United States. The situation has made assets priced in US dollars more attractive to buyers who hold other currencies that are gaining on the greenback.
The greenback is currently trading at 2-month lows, allowing risky assets gain on the prospect of a Democratic-led White House promoting additional stimulus and more aggressively tackling the coronavirus situation.
Technical Levels to Watch
Today’s advance in crude oil prices has met resistance at the upper edge of the channel on the daily chart, somewhere around the 42.50 price level. Bulls will look for an advance beyond this point, as well as the 8 October highs, to re-establish the advance towards 44.16. Beyond this point, the 31 August high at 46.41 lines up as an additional target to the north.
On the flip side, rejection at the present resistance allows for a pullback towards the 41.43 support, with 39.57 lining up as an additional downside target. If the channel’s lower boundary is broken, 36.40 comes into play as well.
Crude Oil Price Chart (Brent; Daily)