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Crude Oil (June)
Yesterday’s close: Settled at 68.05, up 0.35
Fundamentals: Yesterday’s EIA report was not bullish, and in fact it was arguably bearish. However, the market could not go lower; after a quick spike down to major three-star support and new low of 67.11, price action spent absolutely no time below Monday’s 67.14 rejected low. When something cannot go down on bearish news, it becomes a buy opportunity. The geopolitical landscape is keeping prices elevated as tensions remain heated in the Middle East and President Trump holds the cards in an Iran deal that he does not like. If this deal is pulled on May 12th these geopolitical tensions will not only escalate but supply will come off the market. Traders must keep a close eye on the U.S Dollar today with the ECB meeting in focus; if the Dollar had not rallied to this level from recent lows only a week or two ago, Crude would have arguably breached the $70 mark.
Technicals: Price action traded down to major three-star support at 66.87-67.14 and it was as perfect a hold as they come. The settlement in the green invited buyers back to the market and this morning it faces first key resistance at 68.43-68.65. This is a level we pointed to earlier in the week that a move out through encourages further momentum, it happened then, and we believe it will happen again. A solid session today will pave the way for a strong Friday ahead of the weekend. Continued price action above yesterday’s settlement at 68.05 will keep the bulls in the driver’s seat.
Resistance: 68.51-68.65**, 69.55**, 70.00**, 72.35****
Support: 68.05**, 67.49-67.65**, 66.87-67.14***, 65.59-65.70***
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