Noor Trends News, Technical Analysis, Educational Tools and Recommendations
Crude Oil advances higher after US PMI’s lead the way. Euopean PMI data shows a substantial decline in Services and Manufacturing activity in the region.
The US Dollar Index strengthens on Monday, with European investors heading into the safe haven US dollar.
Crude Oil makes a run for it and tries to break above $71.46 in the US trading session after US Purchase Manager Index data came in more resilient in comparison to the United Kingdom and Europe. Add to that the heightened geopolitical concerns from over the weekend, and WTI Crude has enough reasons to move higher. Eerlier this Monday, European preliminary Purchase Managers Index (PMI) data for September revealed a severe nosedive in activity in both the Manufacturing and Services sectors, which could mean even less Oil demand is expected on the horizon for the region.
The US Dollar Index (DXY), which tracks the performance of the Greenback against six other currencies, is being bought on Monday. Investors are fleeing away from the Euro and heading into safe havens such as the dollar after the preliminary PMI data for September showed nearly all PMI indicators in Europe in contraction. The US PMI’s were roughly in line with the Services sector even outperforming, above consensus for September.
At the time of writing, Crude Oil (WTI) trades at $71.59 and Brent Crude at $74.41
Market movers:
The US PMI data looks to be enough as a catalyst to push Crude prices higher with Crude up 0.50% in the US trading session after a rather downbeat start of day in European and Asian trading.
More and heavier attacks to come, Israeli army spokesperson Avichay Adraee said on Monday.
The above comments come after heavy fighting that took place on Sunday between Hezbollah and Israel, with the Lebanese militant group launching missiles deep into northern Israeli territory following intense bombardment — some of the most severe in nearly a year of conflict, according to CNN.
The amount of Crude Oil held worldwide on tankers that have been stationary for at least seven days fell to 56.31m bbl as of September 20, a drop of 12%, Bloomberg reports.
Oil Technical Factors:
Crude Oil is facing some push backs from the bad European economic data released on Monday to be able to break higher. In case the US data comes in softer-than-expected later in the day, a further decline in global demand could be at hand, offsetting the priced-in risk premium on the geopolitical tensions in the Middle East.
A thin equilibrium, which could snap at any moment and on the back of any headline.
The first level to watch on the upside is $71.46 (the February 5 low), which returns to the table as the next level to look out for. Ultimately, a return to $75.27 (the January 12 high) is still possible, but would likely come if a seismic shift in current balances occurs.
On the downside, the initial support remains at $67.11, a triple bottom in the summer of 2023. Further down, the next level in line is $64.38, the low from March and May 2023. Should that level face a second test and snap, $61.65 becomes a target, with $60.00 as a psychologically big figure just below it, at least tempting to be tested.
