USOil is showing a 0.7% loss as it trades at $48.55, which is almost exactly the midway point of Friday’s range. For two weeks now prices have been trending broadly sideways, though the double failure to sustain levels above $50.00 over this time, and the range breaking, three-week low seen on Friday, at $47.98, paints a picture of a weakening directional bias. Data showing a slowdown in Chinese refining, down about 500k barrels per day in July to 10.7 mln barrels, is dominating today’s market narrative. The dollar is also broadly firmer today, rebounding after declining on Friday following tepid inflation data out of the U.S. The H1 trades below two key Fractals today and below the 20 period MA. The parabolic SAR turned negative on the break of the 20 MA and RSI at 44 is neutral/negative. The break of $48.50 could see $48.38 later and the next key fractal high.
The Daily chart also traded below the 20 period MA on Friday for the first time in two weeks, but managed to close the week north of this key support area at $48.55. This key moving average has provided support during the run up during July. A breach and break would likely see a test of $48.00 and even $47.00. Strong technical resistance exists at $49.50 (200 day MA) and the psychological $50.00. RSI is 53 and neutral and the parabolic SAR remains negative.
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