The WTI crude oil has violated the descending triangle pattern, which was providing resistance at 37.20 area. Above this level, we may see the WTI prices heading north towards the next resistance area of 39.37. It seems like the demand for crude oil is gaining in the wake of positive sentiment over the COVID19 vaccine.
The U.K.’s human is going to start the testing of the second vaccine to control the coronavirus outbreak, which exerted some positive impact on the market risk-tone and crude oil as well. The human tests are backed by 41 million pounds ($52 million) in U.K. funding along with another 5 million pounds of donations, including contributions from the public.
On the negative side, the coronavirus cases rose above 8 million globally by Monday, with infections rising in Latin America. Whereas, the United States and China are dealing with fresh outbreaks, which gradually undermining the trader’s confidence about the V-shape recovery and turned out to be one of the key factors that kept a lid on any additional gains in the crude oil.
Bullish sentiment around the crude oil was mainly supported by the optimism over the adherence to the OPEC and its allies (OPEC+) output cut deal by its members. Even, the OPEC+ pact optimism overshadowed the worries over the second-wave of coronavirus and its impact on the global economic recovery.
The investors will keep their eyes on Thursday’s OPEC-led monitoring panel to be led by OPEC as it analyzes producer countries’ success in complying with the cuts. The crude oil supply forecasts from the American Petroleum Institute (API) and the U.S. Energy Information Administration (EIA), due later in the week, will be key to watch.
Daily Support and Resistance
Pivot Point 36.67
Since we are late to join the party and crude oil has already come so far after breaking 37.20 level, we should look for selling trade somewhere around 39.40 or 40.65 level. Both of these levels are going to be work as double top levels and may help investors capture a quick retracement during the U.S. session. Goold luck!