Crude oil prices fell 7% on Thursday as new trade tariffs were imposed on $300billion worth of Chinese goods by the US government.
There is belief in some quarters that the new round of trade tariffs imposed by US President Donald Trump may have been strategically timed to force the hand of the Fed into a 2nd rate cut before the year runs out. Concerns about the global economic outlook as it affects crude oil demand continues to drive risk-off, safe haven demand, which is bearish for commodities.
Technical Setup on WTI Crude
The daily chart for WTI crude shows that yesterday’s price move was a downward resolution of the symmetrical triangle which had encapsulated price movement from June 13 till date. As is often the case with such price breaks, WTI is attempting an upward pullback, but is now testing the previous central pivot support, now acting as a resistance at $55.27. If price is able to cross this barrier and continue the upside pullback, it will meet resistance at the broken triangle’s lower border. It may then meet renewed selling if the market fundamentals stay the same, leading to a push towards pivot supports at 52.65 and 50.89 respectively.
To the upside, further resistance remains at 57.02 and 58.17 respectively. Market response to the Non-Farm Payrolls report may decide the fate of this commodity asset on the last trading day of the week.Don’t miss a beat! Follow us on Twitter.
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