By Fast Brokers – The Crude futures are holding strong above their psychological $80/bbl level as cold fronts continue to hit the U.S. and UK. Harsh winter weather is increasing demand for heating oil, a positive catalyst for crude. Furthermore, tensions in the Middle-East along with encouraging manufacturing data from both the U.S. and China are contributing to crude’s strong performance. However, crude still faces 2009 highs and the psychological $80/bbl area proved to be a tough trading zone in the past. Meanwhile, investors are looking forward to tomorrow’s ADP Non-Farm Employment Change data. A turnaround in U.S. unemployment sparked December’s rally in equities and crude despite positive movements in the Dollar. Hence, it will be interesting to see how investors react to tomorrow’s ADP figure should it print above or below analyst expectations. That being said, crude’s correlation with the Dollar could be unreliable for the time being until we get a better idea of how the correlative forces play out.
Technically speaking, crude’s movement above our 3rd tier downtrend line could be a key development since our 3rd tier runs through November ’09 highs. Hence, crude could be in for a retest of 2009 highs in the near-future. That being said, the psychological $80/bbl area has proven to be a tricky trading zone in the past. Therefore, crude may need more positive fundamental developments to send the future beyond 2009 levels. As for the downside, crude has multiple uptrend lines serving as technical cushions along with 12/29 and 12/24 lows. Additionally, the psychological $80/bbl level may now serve as a cushion should it be retested.
Price: $81.68/bbl
Resistances: $81.81/bbl, $82.26/bbl, $82.75/bbl, $83.18/bbl
Supports: $81.29/bbl, $80.71/bbl, $80.35/bbl, $79.93/bbl, $79.23/bbl, $78.48/bbl
Psychological: $80/bbl, $75/bbl, 2009 highs
Market Commentary provided by Fast Brokers.
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