Bottom line: WTI Crude remains bullish against $0.01 lows, over the long term. The commodity might have hit potential resistance around $40.42 and could produce a meaningful corrective drop lower towards $24.00 at least.

Fundamental Outlook:

DAX continued its rally yesterday closing it at 12922 (futures), the highest since February 24, 2020. The German Index rose over +1.2%, along with SPX500 (+1.2%) and Dow Jones (+1.75%). The 13 week rally has been defying the Economic Damage caused by COVID-19 pandemic and investors are now beginning to believe that the worst is behind.

Markets will now look forward to the Fed meeting to be held tomorrow. R=Interest rates are set to remain on the lower side 0.25% and much of that is already priced in. Having said that, we would warn here to be over optimistic on the hopes of a V-Shaped economic recovery globally.

Gold had drop on Friday to $1671 after the NFP was released. It came in as a surprise as the US adder over 2.5 million jobs in May against the projected loss of over around 8 million. It remains to be seen how Gold prices react to the Fed meet tomorrow as the yellow metals remains vulnerable to break below $1660.

Technical Analysis:

WTI Crude might have just completed its initial rally from $0.01 lows towards $40.42 yesterday. Since the rally looks to be an impulse and has cleared major resistance at $36.00, it is confirmed that WTI Crude has more upside left.

WTI Crude bulls might be preparing for a pause/break as the commodity carves a corrective drop towards $25.00 and $15.00, going further. A break below $35.00 would confirm a meaningful top is in place and intermediary corrective phase is underway.

Traders might be willing to book profits on long positions taken earlier and remain flat for a while. They might consider buying again around $25.00 mark or even lower towards $15.00. Overall, WTI Crude might be considered to be good to buy on dips.

Prepared by

Harsh Japee, Technical Analyst.

WTI Crude

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