USOil Weighed by Inflation & Recession Fears
USOIL Analysis
The commodity started the week on the front foot, looking past poor data from China, the world's second largest consumer of oil, but fears of stagflation returned after poor results from major US retailers, causing SPX500 to post its worst day since the pandemic yesterday.
This knocked USOIL down as well, preventing it from moving past 116.66-93, as we had warned in our previous analysis. Today, it stays on the back foot as sentiment remains downbeat, which creates heightened risk of a return below the EMA200, around which it has been gyrating for a while now.
This could open the door for fresh May lows (98.81), but its recent visits below the EMA200 have been short-lived and we don't see yet a compelling reason for this to change.
USOIL has been making slow progress and trades in the red this week, but runs its sixth consecutive profitable month and risk is skewed to the upside. As such, it can make another effort towards 116.66-93, but it does not inspire at this point for daily closes above it, that will open the door for 122.04.
The commodity may struggle for firm direction in the near term, since there are no major economic releases ahead, but caution is needed, as markets are fragile, grappling with prospects of stagflation.
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. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
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