Crude oil prices found positive support and rebounded again. This rise in crude oil prices is in line with the overall high demand for the commodity which has been observed since the beginning of the summer. The pause in negotiations on the resumption of the nuclear deal with Iran, which may indicate a supply delay from OPEC, is also supporting oil prices.
USOIL tried to equalise the September 2018 peak of $76.88, but drifted by $2.98 from the $73.90 high on Monday. Meanwhile UKOIL matched its April 2019 high ($75.56) at $75.27 amid strong demand optimism to just $11.45 off the September 2018 peak ($86.72). The bullish sentiment comes as global coronavirus vaccinations continue to develop, while the summer travel season also eases demand concerns.
Technical Level
The Norwegian krone strengthened against the Euro and the US Dollar amid strengthening Oil prices. The increasingly hawkish Norges Bank said it is likely to raise interest rates in September. Last week, Governor Olsen and his colleagues on the Committee on Monetary Policy and Financial Stability voted to leave Norway’s key interest rate unchanged at 0%, but gave repeated and clear warnings that borrowing costs are likely to rise before the end of the year.
USDNOK – The bias is temporarily neutral and consolidating after last week’s gains that broke out of the ascending triangle pattern by registering a rebound up to 38.2% Fib. retracement (8.7173) and blocked by the 200-day SMA. The 38.2% Fib. retracement level is an important level, because in the past it was the average monthly high that served as resistance. Since the end of the decline before the rebound, the asset has displayed a divergence bias and consolidated in a fairly long triangle pattern about 43 days before the breakout. The technical support indicator validates the bull movement with AO on the positive side and the position of the candle above KUMO. However it looks like the asset needs further consolidation in the near term, before continuing its retracement to the upside. Immediate support is at 8.4189. As long as this level holds, the bias is likely to remain to the upside.
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Ady Phangestu
Market Analyst – HF Educational Office – Indonesia
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