Crude Oil: Indicators Suggest Price Could Rise Further

Key Highlights

  • Crude oil price recovered significantly above $20.00 against the US dollar.
  • A key bearish trend line was breached near $20.80 on the daily chart of XTI/USD.
  • The US PPI declined 1.2% in April 2020 (YoY), whereas the forecast was -0.2%.
  • The US Initial Jobless Claims for the week ending May 9, 2020 could decline from 3169K to 2500K.

Crude Oil Price Technical Analysis

After a significant decline, crude oil price started a strong recovery above $12.00. There was a clear break above the $16.50 and $18.00 resistance levels push the price in a positive zone.

Looking at the daily chart of XTI/USD, the price gained pace after it broke the $15.00 resistance. Besides, there was a break above the 50% Fib retracement level of the key decline from the $28.89 high to $3.62 low (spot price).

More importantly, there was a break above a key bearish trend line at $20.80 on the daily chart. The price even traded above the 76.4% Fib retracement level of the key decline from the $28.89 high to $3.62 low.

The current price action suggests that the next stop could be near the $28.00 and $29.00 levels. The bulls may even target the 1.236 Fib extension level of the key decline from the $28.89 high to $3.62 low at $34.85 in the near term.

Conversely, there could be a strong bearish reaction near the $28.00 and $30.00 levels. In the mentioned case, the price may possibly start a fresh decrease towards the $20.00 and $18.00 support levels.

Looking at major pairs, EUR/USD made another attempt to clear the 1.0900 resistance, but failed to gain traction. GBP/USD is trading in a bearish zone and remains at a risk of more downsides below 1.2200.

Economic Releases to Watch Today

  • German Consumer Price Index for April 2020 (YoY) – Forecast +0.8%, versus +0.8% previous.
  • German Consumer Price Index for April 2020 (MoM) – Forecast +0.3%, versus +0.3% previous.
  • US Initial Jobless Claims - Forecast 2500K, versus 3169K previous.