Crude oil price on the Brent benchmark is slightly lower this Tuesday, as traders sit on the sidelines to wait for the outcome of the FOMC meeting.
Before today crude oil prices have been on the upside for four straight days as concerns over tight supply outweigh the demand concerns arising from rising coronavirus cases worldwide.
Economies are continuing with reopening efforts and ramping up of vaccinations, which continues to ramp up demand that currently exceeds supply capacity. In early July, OPEC Secretary-General Mohammed Barkindo had predicted a supply shortfall of 6 million barrels per day.
For now, traders are more focused on the FOMC meeting and its impact on the US Dollar. This is why intraday volumes are presently low.
Following the breakdown of the channel’s lower border, the return move has met resistance at the broken border, just below the 75.52 resistance. Bulls need to see the price break above this mark before the pathway towards 77.93 opens. Above this level, the 80.00 psychological barrier remains an additional price target for bulls.
On the other hand, rejection of the return move at the 75.52 resistance/lower channel boundary provides the impetus for fresh offers to come in, which could drive prices lower. In this scenario, 73.34 and 71.44 lend themselves to serving as additional targets to the south. 70.00 and 67.74 (15 March and 20 July lows) only become relevant if the correction is much steeper, which at the moment looks unlikely.
