FxWirePro- Crude oil Daily Outlook

WTI crude oil pared some of its gains after weak US economic data. It hit a low of $77.6 yesterday and is currently trading at $78.18.

University of Michigan consumer sentiment declined to 7 7-month low of 6.56 in May, below the forecast of 72.10.

According to Baker Hughes, the total oil rig count declined by 4 to 590 this week, well below the 687 rigs the same time the previous year. The US Oil Rig Count is at a current level of 488.00, down by 64 compared to last year.

Geopolitical factors plus a surge in US  demand due to the summer season support Oil at lower levels.

Major factors for crude oil price movement-

US dollar index (Bullish)- Negative for Crude.

Major resistance - 105.50/107.

Major support- 104/103.

Geopolitical tension- Escalation of tension between Israel and Gaza ( positive for crude).

Ichimoku analysis (4- hour chart)

Tenken-Sen- $78.37

Kijun-Sen- $78.24

The immediate resistance is around $79.30. Any jump above the target of $79.67/$80/$80.55. On the lower side, near-term support is around $77.60. Any breach below will drag the commodity down to $76.87/$76/$75.

It is good to sell on rallies around $79.15-51 with SL around $80 for a TP of $75.