Risk appetite resumed in full swing on Monday as US President Donald Trump stopped short of unleashing significant sanctions on China, which allowed crude oil price and other risk-based commodities to open higher in early Monday trading. Brent crude is up 0.43% today on a trading day that also shows the US Dollar trading on the back foot as a result of domestic riots across the country over the killing of an unarmed black man.
Crude oil price also seems to be benefitting from news from the Energy Intelligence to the effect that the OPEC + alliance is planning talks to extend the crude oil output cuts of nearly 10 million barrels per day by another 1-2 months. The three factors have ensured that crude oil price has started the week on a positive note, further adding to the gains achieved in the last two sessions.
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Crude Oil Price Outlook on the Brent Crude Benchmark
Following on from last week’s piercing pattern that was formed by the Tuesday and Wednesday daily candles, crude oil price on the Brent benchmark surged 6.36% on Friday and is adding to those gains today. Continuation of the risk-on market sentiment could help crude oil price on the Brent crude benchmark transcend the 35.61 resistance. A close above this level today confirms the breakout of that level initiated by the Friday candle. This setup could then allow crude oil price test the 38.58 resistance level. A break above this level as well helps crude oil to target 41.43, which would take it above the $40 mark.
On the flip side, failure to breach 38.56 could allow for a retest of 35.61 from above, and if this price level fails to hold as a result of shifting market sentiment, we could then have price heading down to challenge the previous resistance-turned-support at 31.69. Below this level, 28.38 remains a viable support price.