An Explosive Rally in Oil & the Key Level to Watch
Updated: Jan 4, 2020
With an impressive start to the year this new heightened geopolitical development could be the catalyst to break Crude Oil out to multi year highs. The U.S. strike that killed a key Iranian general could have a ripple effect on the signing of the trade agreement on the 15th as China and Iran have recently worked together on joint military operations along with Russia. While derailing the trade agreement will most likely negatively impact Grains and Meats, markets like Metals and Energies should continue to benefit from these geopolitical risks.
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Price Analysis and Outlook
The daily crude oil chart shows that momentum indicator slow stochastics are rising steadily and reaching overbought territory giving longer term indication that we have pushed into a Bull Market. While ADX, which measures strength of the trend, has turned up over 35 showing that the driving force behind the recent upward move is very strong. The 2 key levels of resistance to watch are the April 22nd high of $64.06 and the January 3rd high of $64.06. This could act as a potential double top however a break through of this level should spark another short covering wave up to $65.
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