For oil bulls, it is a bit unfortunate that things are not lining up as they would want. The bullish news over the weekend helped to tee up a gap higher above $80 but economic worries from poor US data and the scarring impact from the banking rout is weighing the global growth outlook.
Adam made some good points on that here, so I'll be diving more into the technicals.
As mentioned at the start of the week, the gap higher is encouraging as it sees oil break above the 100-day moving average (red line). However, that doesn't mean that the work is done as key resistance around the region of $82.30-60 is still holding and buyers will have to break above that to really establish the next upside leg.
A drop back below $80 towards the end of the week would be a big setback but essentially, if price holds above the 100-day moving average, buyers are still in it with a shot to chase a stronger move to the upside.
But for now, it's essentially a battle of two differing outlooks mostly. The more localised one for the oil market seems to be favouring higher prices but the bigger picture outlook involving the global economy isn't as supportive now after the banking turmoil, and that is quickly shifting the narrative across broader markets in general.
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April 06, 2023 at 11:28AM
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Oil struggles to build on the gap higher from the start of the week - ForexLive
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