Crude oil is making recovery in Asian session today after falling to $91.63 on Monday amid Iran deal that would ease economic sanctions thus the country may be able to resume exports.
Light Sweet Crude Oil futures for February delivery slid down sharply in the US session yesterday when news showed that talks among Russia, China, France, Britain, Germany, the US and Iran had ended successful on a crucial agreement that would halt Iran’s nuclear advancements and in return the country could export its products including oil that would boost global oil supply.
Crude oil is being traded at $92.22 per barrel at the time of writing in Asia. Bias looks very bullish in near term as the commodity has printed a higher low as well as a classic double bottom pattern on hourly chart as shown below.
As you can see the neckline or the highest point between the two bottoms is at $93.54 that must be broken in order to complete this double bottom price pattern, in turn ending the price around $95.72.
It is however pertinent that contrary to technicals, the macroeconomic scenario is certainly not positive for the black gold. On Friday the US labor department revealed that the unemployment rate has fallen down to 6.7%, the lowest level in more than five years. Earlier ADP research institute had also said in a report that significant progress was made by labor sector.
Keeping in view the continuity of impressive outcomes showed by labor sector and better than expected GDP rate in 3rd quarter, the US central bank in December announced trimming in its unparalleled monthly bond buying program worth $85 billion. Furthermore minutes from Federal Open Market Committee (FOMC) December meeting revealed that this was only a beginning, Fed policymakers actually wanted to repeat this action on every meeting until the bond purchase program is completed ended in October this year. This phenomenon is keeping Crude Oil as well as all other commodities in bearish pressure.
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