It was largely expected to arrive, and Market participants finally got it: The EU-US Trade Deal has finally (almost) been reached.
For now, markets have only an outline of the actual Deal that needs to be finalized, but to the Market’s understanding, the Deal is done.
The is looking a bit stronger after the news, particularly against the Euro after forming what resembles a double-top – let’s see how the Markets play this one.
Equities, on the other hand, are showing a mixed reaction, with the selling off after the news, for example.
The subject of today’s piece is , which, although still trading in its range, is seeing some sharp buying.
Let’s take a look at the technicals that precede a potential breakout.
US Oil Intraday Charts
The rangebound action warrants a closer look to Oil prices, reason why we will omit from taking a look at the Daily charts in today’s analysis
US Oil 4H Chart
Source: TradingView
The action has decidedly been rangebound in the Black Gold despite failing twice to break above around $70 and consequently seeing a tightening of the range to $65.5 – $67.
We mentioned in our preceding Oil analysis how a range, despite showing signs of the balance tilting to the buyers or the sellers’ side, can be expected to hold as long as it holds.
It is the same as trends which traders usually anticipate to reverse way earlier than they actually do – this is why it’s important to be patient and wait for confirmation.
Let’s see closer however to see if there is anything to tip the scales in this morning’s action.
US Oil 1H Chart
Source: TradingView
Buyers are stepping in quite aggressively with traders taking the commodity up close to 3% since the Sunday open.
The action is currently overbought but with the strength of the current buying, it would be more common to see consolidation around here rather than a full retest of the range lows.
Oil bulls are taking prices just above the Key Pivot level in the Middle of the range around $67.50 – In rangebound action, always keep an eye on such levels to spot if the breaching of such triggers reactions.
And reactions we are getting. Let’s take an even closer look.
US Oil 15m Chart
Source: TradingView
The move is currently stalling from way overbought levels, but the action is holding above the Pivot zone mentioned right above (65.45 to $65.70).
Buyers have stepped in quite strongly in this morning wave forming a tight bull channel
Holding above the pivot zone will indicate higher probabilities of testing the highs of the range, with an intermediate resistance from earlier July trading stepping in around $68.50.
Safe trades and successful trading week!