News & Analysis
Eightcap CFD technical insights: Oil bounces after testing 66.00, selling pressure remains
Oil staged a strong session on Friday despite a strong turn away from risk due to the ongoing currency crisis in Turkey. EIA comments helping buyer sentiment. In its monthly report, the EIA advised a plan to target crude sanctions against Iran could significantly impact global supply and exhaust the world’s spare oil capacity cushion.
“As oil sanctions against Iran take effect, perhaps in combination with production problems elsewhere, maintaining global supply might be very challenging and would come at the expense of maintaining an adequate spare capacity cushion,” the Paris-based organization said Friday. “Thus, the market outlook could be far less calm at that point than it is today,” the IEA added.
President Trump also warned that unless Iran, which is a member of the OPEC complies with U.S. demands. The White House will look to impose far tougher measures in early November. USOUSD closed Friday’s session with a 102 cent gain hitting $67.14.
Today sellers have lead as rising trade tensions dented the outlook for fuel demand growth, especially in Asia. “Demand growth from Asia, in general, is being called into question. This due to the negative impact of trade wars, a stronger dollar and rising funding costs,” Ole Hansen, head of commodity strategy at Denmark’s Saxo Bank, said.
Looking at the current daily chart we can see a few levels popping out for traders. Resistance remains in play from 67.15 lines up with a previous low. This is is the current seller line of defence. Buyers continue to hold from 66.00 support. This level has held for 3 tests now and lines up with a previous high set in June. For sellers to get the downtrend back on track they will need to break this level. While this level holds buyers have the imbalance on the short term.
Good Trading from Eightcap.
Sources; EIA – Saxo Bank
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