Crude futures find themselves stuck around their psychological $80/bbl level following mixed U.S. labor data and relatively quiet central bank meetings. Both the Fed and ECB kept their monetary policies unchanged, while the BoE increased its QE packaged by 25 billion Pounds vs. 50 expected. Hence, the Dollar is getting a slight boost, yet the ECB's inaction leaves investors a bit disappointed. Therefore, although the technical environment for the EUR/USD and GBP/USD are improving, downside pressures remain. Due to all of the mixed signals around the marketplace, crude is opting to consolidate around $80/bbl as investors await tomorrow's key unemployment data from the U.S. The U.S. will print its headline Unemployment Rate along with Services Employment Change data. Since the central bank meetings left something to be desired, tomorrow's wave of data could prove to be a market mover. Because crude is reliant on personal consumption of gasoline, employment figures directly impact the outlook for aggregate demand, and consequently effect the price of crude. As a result, positive unemployment data could help send crude towards previous 2009 highs, while disappointing figures could drive the futures towards previous November lows.
Meanwhile, our trendlines are beginning to reach their respective inflection points, meaning a period of increased volatility could be approaching. Crude futures are well within reach of previous 2009 highs, and are a burst away from a potential near-term topside breakout. On the other hand, topside barriers remain in the form of our 2nd tier downtrend line while $80/bbl could continue to have a gravitational pull on price for the time being. As for the downside, crude has our 1st tier uptrend line serving as a technical cushion along with 11/3 lows. However, there aren't too many strong immediate-term supports below these cushions besides the psychological $75/bbl level. Therefore, crude futures could easily reverse course should their present cushions give way.
Overall, the relatively strong position of the Dollar and the S&P's present resilience above 1050 creates a positive environment for crude's near-term performance. However, any significant technical reversal in either of these investment vehicles could change the picture.
Resistances: $80.96/bbl, $81.52/bbl, $81.98/bbl
Supports: $79.45/bbl, $78.63/bbl, $77.62/bbl, $76.89/bbl, $76.63/bbl
Psychological: $80/bbl, $85/bbl, $75/bbl