USOIL Suppressed for Second Straight Week but Defends Key Tech

  • USOil

USOIL Analysis

The commodity made a poor start to the week, extending the pullback from the 2023 highs it reached earlier this month, on China and Fed woes. The recovery of the world's second largest economy is faltering, as indicated by a constant string of disappointing data. Authorities are trying to prop the economy, but appear reluctant to embrace big stimulus for now, which was underscored by Monday's conservative LPR cut by the central bank.

At the same time, the higher-for-longer narrative is gaining traction in the US, due to mostly strong economic data and hot labor market, despite signs of cooling. Fed Chair Powell has kept both a hike and a hold on the table for the September meeting, creating uncertainty around the monetary outlook. Markets are eagerly awaiting his speech at Jackson Hole today, hoping for more insights around the Fed's intentions, which can affect oil prices.

USOil runs its second losing week, testing the EMA200 and the 23.8% Fibonacci of summer's low/high advance. This creates risk for further losses, but a rising daily Ichiouku can contain deeper correction. Despite another lackluster week, the commodity is upbeat over the last couple of days and defends the aforementioned pivotal tech levels. Above the 38.2% and the EMA200, upside bias is intact and USOil retains the right to push for new 2023 (84.91).

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

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