Post-Fed recovery attempts so far lack momentum to accelerate stronger
WTI oil eased $1 in European trading on Tuesday after attempt to extend recovery stalled at $25.64.
Oil was boosted by Fed’s latest steps to bolster the economy, hit by corona virus pandemic, but $2 trillion-worth aid package is still waiting for approval of the Congress.
Weaker dollar after Fed’s announcement also helps oil prices.
On the other side, strong fall in global demand on negative impact of the pandemic to the global economy, which is one step from the recession along, with the price war between Saudi Arabia and Russia, continue to weigh on oil price.
Some positive signals are expected from American support to Saudi Arabia that was announced last week, but still pending and leaving the oil price to depend on offer/demand principles.
In case that Fed’s latest deal congressional verification is further delayed, oil price may lose traction and risk fresh fall towards $20 zone.
At the upside, falling 10DMA ($27.55) marks first pivot ahead of psychological $30 barrier, violation of which would improve near-term sentiment.
Res: 25.64; 27.55; 28.59; 30.00
Sup: 24.18; 23.95; 22.62; 21.84