With today’s Core CPI printing at 0.2%, cooler than expected, markets may interpret this as the FED pausing rate hikes for now. However, is this enough to dampen the prevailing narrative and curb discussions of further rate increases? While it doesn’t provide a clear green light for a “risk-on” environment, markets reacted positively. Stocks soared, and banks reported strong earnings.
US oil prices followed suit, with the weekly downtrend channel resistance currently being tested. Near-term factors, as outlined in our Alpha Edge Report (Jan 13), continue to support the daily bullish case. Notably, oil remains within a monthly consolidation triangle, with key support at $66. Both the monthly and weekly RSI momentum indicators are bullish. Price has already closed above the daily resistance level of $78 on the 4H chart. A daily close above this level would shift the focus to the next target of $80. We remain bullish on oil in both the near and mid-term outlooks.
Trading Strategy
Ideally, we would prefer a retracement to the low $75 range, as entering long positions from $76–$78 offers limited value. Having exited our previous long trade from $68 to $75, we remain sidelined for now. Our next entry will be contingent on a strong bullish daily close above $79.24.
Key levels to watch:
For bulls: $80, $84, $85, and $88.
For bears: $76 and further down to $71.
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