Crude Oil Price Hits 8-Month High, Why $50 Is Crucial Hurdle

Key Highlights

  • Crude oil price rallied above $43.50 and traded to a new 8-month high.
  • A crucial resistance is likely waiting for buyers near the $50.00 level.
  • EUR/USD surpassed the 1.1900 resistance, GBP/USD is approaching 1.3400.
  • The US Gross Domestic Product grew 33.1% in Q3 2020 (Prelim).

 

Crude Oil Price Technical Analysis

In the past few weeks, there was a steady increase in crude oil price above $40.00 against the US Dollar. The price surpassed many hurdles near $42.00 to move into a positive zone.

Looking at the weekly chart of XTI/USD, the price gained pace above the $42.50 and $43.50 resistance levels. There was also a break above the 61.8% Fib retracement level of the main drop from the $65.65 high (formed on TitanFX on 2020.01.08) to the $3.62 low.

The price traded above the $45.00 level, but there is a crucial resistance waiting for buyers near the $50.00 level. The 100-week simple moving average (red) is at $47.50 and the 200-week simple moving average (green) is at $52.50.

It seems like there are many hurdles, starting with $47.50 and up to $55.00. A clear break above $55.00 might set the tone for a push towards the $65.65 swing high. If not, the price might start a downside correction towards the $40.00 support.

Fundamentally, the US Gross Domestic Product report for Q3 2020 (Prelim) was released yesterday by the US Bureau of Economic Analysis. The market was looking for a strong growth of 33.2%.

The actual result was close to the market forecast, as the US Gross Domestic Product grew 33.1%, according to the "second" estimate.

Looking at EUR/USD, the pair gained pace above 1.1880 and it broke the 1.1920 resistance. GBP/USD is rising, but it must clear the 1.3400 resistance for more upsides. Besides, gold price tested the $1,800 support and started consolidating losses.

Economic Releases to Watch Today

  • Germany’s GfK Consumer Confidence for Dec 2020 – Forecast -5.0, versus -3.1 previous.