Crude Oil Price Surges Above $42 Despite Dollar Strength

Key Highlights

  • Crude oil price rallied above $42.00 to set a new monthly high.
  • EUR/USD extended its decline below the 1.1800 support zone.
  • GBP/USD started a downside correction after testing the 1.3300 resistance.
  • The US Consumer Price Index could increase 1.3% in Oct 2020 (YoY), down from +1.4%.

 

Crude Oil Price Technical Analysis

This past month, there was a sharp decline in crude oil price below the $38.50 support against the US Dollar. The price found support near $33.60 and started a strong upward move.

Looking at the 4-hours chart of XTI/USD, the price started a strong upward move above the $36.00 and $38.50 resistance levels. The bulls gained pace, and the price climbed above the $40.00 resistance level.

There was also a break above the $41.20 resistance, the 100 simple moving average (4-hours, red), and the 200 simple moving average (4-hours, green). Finally, the price cleared the $42.00 resistance and traded to a new monthly high close to $43.00.

If there is a downside correction, the price is likely to find support near the $41.50 level (the recent breakout zone). Any further losses could lead the price towards the $40.00 support.

On the upside, the $43.00 level is a strong resistance. A clear break above $43.00 could open the doors for a sharp increase towards the $45.00 zone in the coming sessions.

Looking at EUR/USD, there were additional losses below the 1.1800 support level. GBP/USD also started a fresh decline after it failed to close above the 1.3300 resistance. Gold price also remained in a bearish zone below the $1,900 support zone.

Economic Releases to Watch Today

  • UK GDP Q3 2020 (Preliminary) (YoY) - Forecast -9.4%, versus -21.5% previous.
  • UK Industrial Production Sep 2020 (MoM) - Forecast +0.8%, versus +0.3% previous.
  • UK Manufacturing Production Sep 2020 (MoM) - Forecast 1%, versus +0.7% previous.
  • German Consumer Price Index Oct 2020 (YoY) – Forecast -0.2%, versus -0.2% previous.
  • German Consumer Price Index Oct 2020 (MoM) – Forecast +0.1%, versus +0.1% previous.
  • US Consumer Price Index Oct 2020 (MoM) – Forecast +0.2%, versus +0.2% previous.
  • US Consumer Price Index Oct 2020 (YoY) – Forecast +1.3%, versus +1.4% previous.