Crude futures are consolidating around the psychological $80/bbl level after hitting interference at our 3rd tier uptrend line. Meanwhile, the Dollar is weakening and equities strengthening due to a combination of strong China econ data along with dovish statements from Fed officials. The impressive Industrial Production and Retail Sales data out of China helps compensate for recent news that China's gasoline prices will rise by around 3-5%. The increase in production and retail consumption in China bodes well for crude's aggregate demand. However, crude futures are still facing headwinds at $80/bbl and previous 2009 highs as investors are likely waiting to see how the EUR/USD and S&P deal with 1.50 and 1100, respectfully. A topside breakout in either could signal a similar movement in crude due to their positive correlations. On a positive note, gold has extended its gains above its psychological $1100/oz level. Gold has led the way recently and the precious metal's topside statement could prove to be a positive signal for crude.
Technically speaking, crude faces technical barriers in the form of our new 2nd tier downtrend line along with 11/05 and 2009 highs. Furthermore, $80/bbl continues to serve as an important psychological level. As for the downside, crude multiple uptrend lines service as technical cushions along with 11/10 and 11/06 lows. Additionally, the psychological $75/bbl level could prove to be a psychological support should conditions deteriorate. Meanwhile, investors will receive weekly Unemployment Claims data tomorrow along with Crude Inventories. If both data points come in lighter than expected, this may provide crude futures with a bit of a boost to the topside, and vice versa.
Technically speaking, crude has our 1st tier uptrend line serving as a technical cushion once again along with 11/06 lows and the psychological $75/bbl level. As for the topside, crude faces previous 2009 highs. Meanwhile, crude's movement should follow the path of the Dollar for the most part until the wave of Chinese econ data late Tuesday EST.
Resistances: $80.43/bbl, $81.08/bbl, $81.61/bbl, $81.94/bbl
Continue Reading Below
Supports: $79.82/bbl, $79.53/bbl, $78.79/bbl, $78.47/bbl,$77.98/bbl, $77.34/bbl
Psychological: 2009 highs, $80/bbl