Oil looks to hold bounce of July lows for now

Products You May Like

WTI crude up 0.8% to near $67 on the day

Oil suffered a beating yesterday in a fall to test its July lows but the support region there held and we may see a short-term double-bottom pattern form in the commodity.

The 100-day moving average (green line) is still seen @ $67.13, so keep below that and any bullish bias remains limited as well – at least for the time being.

While buyers may have staved off a fresh leg lower in oil prices, any material rebound or upside to retest the early July highs may be tough to come by.

The market is showing a keen focus on the spread of the delta variant in China in particular and until there is some good news there, headlines are to suggest a higher likelihood of flagging demand conditions (or at least a temporary hit).

As for today, SCMP reports that China’s local COVID-19 outbreak has hit its highest daily cases total since the current wave began on 20 July. While oil may be bouncing a little based on a technical reprieve, the fundamental developments aren’t too positive lately.

And until things change on the latter front, dip buys – still the preferred stance – will face tougher resistance as compared to the more straightforward case in earlier months.

Invest in yourself. See our forex education hub.

This article was originally published by Forexlive.com. Read the original article here.