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Crude Oil Daily Forecast – Crude Rebounds as Markets Stabilize
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Crude has been hammered this week, but prices are higher on Friday, as investors are hopeful that the U.S. government and Federal Reserve will swing into action and provide relief in the midst of coronavirus crisis.
Crude prices have moved higher on Friday. Currently, U.S. crude oil is trading at $33.74, down $2.79 or 8.97% on the day. Brent crude oil is trading at $35.65, down $2.96 or 9.02%.
Crude Rebounds as Congress, Fed Mobilize
It has been a dreadful week for U.S. crude, which has plunged 19.4 percent. The markets were hit by massive stock sell-offs on Thursday, but the markets have leveled off on Friday. Investors are hopeful that the U.S. Congress and Federal Reserve will provide relief which will ease the economic crisis caused by the coronavirus outbreak. Lawmakers are working on an economic package to address the coronavirus crisis, which could be unveiled as early as Friday. Stephen Innes, global chief markets strategist at AxiCorp, noted that a bipartisan response to the current crisis is having a calming effect on the market, as it “suggests that there will be a little obstacle to a more massive stimulus effort.”
Aside from coordination between Congress and the White House, the Federal Reserve is also taking concrete action. Analysts expect the Fed to cut rates again at next week’s policy meeting. Last week, the Fed stunned the markets and slashed rates by 50 basis points, in what was the first time that the Fed cut rates in between policy meetings since 2008. As well, the New York Federal Reserve made a dramatic move on Thursday, as it said it would inject more than $1 trillion into the markets in the next few days.
Technical Analysis
The line of 32.80 remains fluid. Currently, it is an immediate support line. This is followed by support at 29.85. If crude crosses below this line, it has room to fall as low as the 29.00 level. On the upside, we find resistance at 35.50, followed by 37.50.
About the Author
Kenny Fisherauthor
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.
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