WTI closed half a point higher yesterday at $56.49 after reaching a high of $57.39 on rising hopes that the US and China will sign the phase 1 of a trade deal this month as President Xi vows commitment to global trading order in return for a rollback on the US imposed Tariffs. Negotiators asked the Trump administration to eliminate tariffs on about $110 billion in goods that were imposed in September and lower the 25% tariff rate on about $250 billion of goods that began last year, in return for a Chinese commitment to respect US intellectual property and decrease trade surplus.
Bullish momentum on WTI as both resistance levels were tested in yesterday’s session while prices retraced and registered a daily close below our R1 at $56.49 after testing the 200 SMA (which also coincides with R2 at $57.21) . A breach of R1 at 56.70 will push prices higher in a second attempt to test the 200 SMA and R2 at $57.21, while a failure to do so will have prices retrace to S1 at 56.22
Support: 56.22/ 55.85
Resistance: 56.70/ 57.21/ 58.19