Crude oil prices are flashing red despite the renewed optimism over US-China trade negotiations. US President Donald Trump said on Monday he expected to sign a significant part of the trade deal with China ahead of schedule. "We are looking probably to be ahead of schedule to sign a very big portion of the China deal, we’ll call it Phase One but it’s a very big portion.” Trump's comments bolstered the bullish action in the US stocks, pushing the S&P 500 index to a new record high. Even so, the black gold is trading under pressure, possibly due to expectations for a bearish US inventory report. Total US Crude inventories are forecasted to have increased by around 700,000 barrels in the week ended Oct. 25, according to a Reuters poll of analysts.
Crude oil prices lost traction as expected during yesterday’s session, breaking to the downside after printing a high of $56.89 per barrel. The price is currently trading just below the $55.5 level with the momentum refraining towards the bearish territory after breaking the trend line presented on the RSI chart to the downside. We will be focusing on a consolidation in this area as we will set our eye on the $55.06 support level.
Support: 55.05/ 54.42
Resistance: 55.92/ 56.27