The market traded in a tight range this week, near its top around the 40$ handle failing to break the resistance level. Moreover, a whole month into consolidation with a total lack of fundamental supports has brought the market to retrace in yesterday's trading session, losing its grip and registering a drop of about 3% and continuing this downward momentum at today's opening Friday Asian's session. Finally, the "debate" about peak oil demand having already arrived aims the pandemic, and new outbreaks continue now with some skepticism.
Technically speaking, there is not much to say, a whole month into consolidation, and last week trading in a tight range, it has kept most investors out of the market expecting some real catalyst. In the intraday realm of H4, a breakout from a smooth ascending channel has just happened, EMA forming a death-cross and price heading towards its support level from the D1 timeframe channel. MACD in a diminished bullish trend with RSI in the land of nobody for unambiguous confirmation of bears diving in. The trend consolidation in price action is expected to remain unchanged for the time being
Now, concerns are coming from the fundamental front, with some states in the US hitting single day peaks for coronavirus deaths, Anthony Fauci, the "expert" suggesting to look into lockdown protocols raising concern about the country's economic outcomes. Reports from EIA and build-up of inventories to +5.6M barrels vs. -3.19 M expected has hit the demand and confirm the economic recovery slowdown. With Saudi Arabia and the OPEC+ new concerns about the expiring agreement for production cuts and no-compliance of some members in the cartel, that remain laggards in their quotes create a dark-cloud shadow that unfortunately dominates the market sentiment.
This week's closing looks bearish for the market. In the meantime, let's keep sit on our hands, enjoying the weekend ahead. Stay safe and remember the social distancing. May the market stays with us. Happy Friday.