Despite bouncing back from its losses, WTI increase seems capped below the $62.5 level as bulls and bears jostle over the news concerning the US-China trade deal and the US troops sent to Iran. As per the Reuters’ news report, the US sent a carrier strike group and bombers to Iran to counter “credible threat by Iranian regime forces” during Monday. It was also reported that the US Secretary of State Mike Pompeo sees an escalation of the US-Iran tension. However, the black gold’s recovery remained under pressure after another news from Reuters mentioned that the US lawmakers support the President Trump’s threat to levy tariffs on China in case of a failed trade meet with China by Friday. In addition to that, the market will also be focusing on the API report due to be released later in the day.
After breaking the long term purple trend line presented on the chart, Crude oil prices have been declining in a rapid pace printing on Monday's early session a low of $60.15 per gallon. However, these losses were quickly erased throughout the days as the price surged back up towards the $63 level but could not hold above the $62.5 level. The price is currently trading below the $62.32 resistance level. We expect from the price to edge a bit lower to see if it can gather the right momentum to surge back up. The next level to watch will be the $61.55 support level.
Support: 61.97/ 61.55
Resistance: 62.32/ 62.75