Crude futures are adding onto yesterday's pullback after UoM Consumer Sentiment printed much weaker than analyst expectations. However, crude has managed to stabilize after yesterday's selloff sent crude tumbling towards the psychological $75/bbl level in reaction to a strengthening Dollar and a larger than expected weekly inventory surplus. Crude finally chose a direction after its incessant consolidation around the psychological $80/bbl level. Unfortunately for bulls, crude's dip below our important 1st tier uptrend line resulted in more accelerated immediate-term losses. Our 1st tier uptrend line runs through October lows, meaning that a recovery back towards our 1st tier could indicated more losses in the near-term.
Crude futures won't be short of news to move off of since investors will receive Retail Sales and Manufacturing data from the U.S. on Monday along with Prelim GDP numbers from Japan late Sunday EST. Retail Sales can be a market mover for crude since they can serve as a reading for the state of overall consumption in the U.S. economy, and thereby demand for crude. Positive Retail Sales data could help counteract today's disappointing UoM reading. On the other hand, disappointing Retail Sales numbers could exacerbate crude's present pullback.
Meanwhile, investors should monitor the EUR/USD's ability to recover from intraday losses as well as gold's resilience above $1100/oz. A substantial deterioration in either investment vehicle could place further downward pressure on crude due to their positive correlations. Technically speaking, the $75/bbl level could prove to be a reliable psychological support should it be tested. As for the topside, crude faces multiple downtrend lines along with 11/12 and 11/04 highs. Additionally, the psychological $80/bbl should continue to serve as a hefty psychological barrier should it be retested.
Resistances: $76.17/bbl, $76.44/bbl, $77.44/bbl, $77.98/bbl, $78.49/bbl
Supports: $75.65/bbl, $75.17/bbl, $74.83/bbl, $74.33/bbl, $73.72/bbl
Psychological: 2009 highs, $75/bbl, $80/bbl