Oil Rose On US Rate Cut, Geopolitical Risk

Fundamental Analysis

* Crude Surge: Oil prices gained slightly during early trade on Monday, boosted by concerns conflict in the Middle East may impact supply in the key producing region and expectations the U.S. interest rate cut last week will support demand. Investor continue to digest on Fed rate cut move of half a percentage point a larger decrease in borrowing costs than many expected. Interest rate cut typically boost economic activity and also oil demand as high interest rate increase consumer and manufacturer cost which reduces the amount of time and money people spend driving. On the other hand, Hezbollah, an Iranian-backed group based in Lebanon, and Israel exchanged heavy fire into Sunday, as the group sent rockets deep into northern Israeli territory after facing some of the most intense bombardment in almost a year of conflict.

Technical Analysis

* Technical Breakout: Crude oil price was traded higher while currently testing the resistance level 71.45. MACD which illustrate bullish momentum signal suggest the commodity to likely further extend its gains after it breaks above the level.

*Resistance and Support: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards 75.50 after it breach above the level 71.45. Conversely, a potential reversal is also to be expected and the price could head back towards the level 67.55.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Moving ahead, investors will focus on the upcoming U.S data to determine the direction of Fed for further rate cuts. Additionally, market will also continue to monitor the developments in the Middle East.

Know how to manage trading risks with risk management strategies.

Monitoring

Stay updated on US and Japan data, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.