Crude oil price is on a decline amid a strengthening US dollar. At the time of writing, Brent futures were down by 0.6% at $72.56. Similarly, WTI futures have dropped by 0.23% at $70.88. With the dollar index trading around its 2-month high at $91.94, it has become more expensive for the buyers with other currencies.
Besides, the rising COVID-19 cases in the UK have cast doubts on when the country and the larger European continent will return to normalcy. On Thursday, the UK recorded 11,007 new cases, which is its highest number since 19th February. It is also higher than the 9,055 cases recorded the day before. Nonetheless, optimism of heightened global oil demand has helped support crude oil prices above $70 per barrel.
Brent oil technical outlook
Crude oil price is consolidating after declining from an intraday high of 74.51 to 72.02 in the previous session. At the time of writing, Brent futures were down by 0.6% at 72.56. Despite dropping from its two-year high of 74.51, the prices have remained above the crucial resistance-support level of 70. Notably, Brent oil has been trading above that level since the beginning of June.
On a four-hour chart, crude oil price is trading slightly below the 25 and 50-day exponential moving averages with an RSI of 41. It is currently seesawing around the 25-day EMA at 72.50. I expect the price to trade within a tight range in the near term before breaking out on the upside. The borders of the horizontal channel are likely to be at Thursday’s intraday low of 72.02 and along the 25-day EMA at 73.26. A move above the channel’s upper border will place the next target at Wednesday’s intraday high of 74.51. However, a move below the channel’s lower border will invalidate this thesis.
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Crude oil price chart
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