It has been a roller-coaster week for crude, which has shown strong volatility after clashes between the U.S. and Iran. The situation has eased somewhat, sending crude prices below the $60 level.
U.S. crude is slightly lower on Friday. Currently, U.S. crude is trading at $59.25, down $0.36 or 0.60%. Brent crude is trading at $65.05, down $0.33 or 0.50%.
U.S. crude is heading towards its worst one-week decline since July, as it has fallen 5.7 percent this week. The dramatic developments in the Middle East have sent crude prices on a rollercoaster ride. On Wednesday, crude jumped above $65, for the first time since April 2019. The spike occurred after Iran attacked two U.S. bases in Iraq. However, the attack appeared designed to avoid U.S. personnel and caused mild damage only. Investors took this as a signal that Iran was looking to de-escalate the situation, once it had responded to the killing of a top general by a U.S. airstrike.
The U.S. also stepped back, as President Trump lowered the rhetoric, saying that the Iranian attack had caused minimal damage and added that the United States is “ready to embrace peace with all who seek it.” The ease in tensions has sent crude below the $60.00 level. Crude remains under pressure, as it dropped to a low of $58.67 on Thursday. This marked its lowest level since December 11th.
After a week dominated by the U.S-Iran showdown, investors will have a chance to analyze some key economic reports on Friday. Nonfarm payrolls are expected to drop to 150 thousand, down from 266 thousand a month earlier. However, ADP nonfarm payrolls looked very sharp earlier this week, climbing to 202 thousand, its best showing since April. Wage growth is expected to rise to 0.3%, up from 0.2% in November.
WTI/USD has been losing ground, but some nearby support barriers could make further downward movement difficult. The 50-EMA line is just below the pair, at 59.12. This is followed by support at 58.75. Below, there is support at the round number of 58.00. On the upside, 60.00 remains relevant and is the next resistance line. Above, there is resistance at 61.50.
Kenny is an experienced market analyst, with a focus on fundamental analysis. Kenny has over 15 years of experience across a broad range of markets and assets –forex, indices and commodities.
