Brent crude oil has plunged about 18 percent from mid-April peak but would still need to fall another 15% percent to erase all of the 2019 gains. It has closed below the previous day’s low for five days in a row. The run last extended to same five days the other week and on December 2018 when the run lasted for seven days.
Finally, it has ended the four-month rally and down nearly 15.00% last month, with breaking the 61.8% fib reaction. It has officially entered correction phase again, down more than 18.00% from a recent high.
Turning to the daily indicators, the RSI is marking below the oversold level, whereas the oscillator is remaining bearish. On the downside, supports at the 59.00$ and 58.50$ will be in focus today, below here focus shifts to 57.70$ (monthly) and 57.00$ its 50MA (Weekly).
The flip side, 62.50$ is the critical resistance, above here 64.00$ comes into the picture.
The daily indicators suggest lower prices in the near term, and we watch appetite around 57.70-57.00$ levels.
The selling was accelerated, especially after Trump’s threat to impose 5% tariff on all Mexican imports, which raises the demand concerns. Trump also said that the tariff rate would gradually increase up to 25% in October.
SP Global said “US President Donald Trump’s threat to impose a 5% tariff on all Mexican imports effective June 10 would hit US Gulf Coast refiners’ top source for crude imports and raise the prospect of damaging retaliatory tariffs on booming US refined product exports.”.
View: The oil prices remain under pressure until we hear a clear word from the White House. In case of any exemptions to Oil/related products, we would see an impulsive rally towards 66.00$ and 69.00$.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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