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Crude Oil (June)
Yesterday’s close: Settled at 68.64, up 0.24
Fundamentals: Crude Oil ripped back yesterday in the face of a stronger Dollar to finish $1.50 and 2.2% from its session low. Brent Crude Oil extended gains to breach the $75 mark and trade to the highest level since November 2014. The reversal came as the Iran deal makes it way into headlines and the deadline only for a decision from the White House looms only three weeks out. Analysts point to Brent extending gains to $80 if the deal is rescinded; it would theoretically remove Iranian supply from a market that is nearly balanced. Furthermore, such a decision also brings geopolitical consequences. While Russia urges the U.S to stay in the deal, French President Macron is traveling to Washington to do the same. Adding to support was a bullish OPEC statement on Friday. This is easily forgotten as it was drowned out by the noise from President Trump’s tweet. Additionally, inventories come into the picture today and are expected to show what would be the largest draw in three weeks.
Technicals: Price action fought off early selling to recover extremely well yesterday. The session low of 67.14 came right in front of major three-star support but ultimately clawed to hold first key support for much of the morning. While the rip back was more fundamental in nature, the technicals kicked in additional buying; we said on yesterday’s Midday Market Minute that a move out above the 68.35-68.61 will be very bullish, price action traded to a high of 69.33. First key support now comes in at 68.49 and it will be critical for this level to hold in order to keep this immediate-term bullish move intact.
Resistance: 69.55**, 70.00**, 72.35****
Support: 68.49**, 67.97**, 67.49-67.65*, 66.87-67.14***, 65.59-65.70***
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