This week, the oil market received another set of bullish headlines, with Saudi Arabia and Russia announcing the extension of their output cuts. This development has provided support to oil prices and is expected to help sustain them near the $70 level. However, in the event of additional recessionary economic data being released, it is highly probable that Crude Oil may experience further declines, potentially pushing prices to lower levels.
Observing the daily chart, it becomes evident that Crude Oil has been trading within a range for approximately two months, oscillating between the $67 and $73 levels. The stability of oil prices near the $70 mark can be attributed to the OPEC+ production cuts, which have helped to maintain a sense of equilibrium. However, the manufacturing sector's recession and the overall slowdown in the global economy continue to exert downward pressure on the value of this valuable commodity.
Examining the 4-hour chart beloq, it is evident that the price of Crude Oil has once again found a solid bounce from the $67 support level and is currently setting its sights on reaching the $73 resistance level. Typically, in rangebound markets such as this, it is advisable to exercise caution and avoid trading until a clear breakout occurs, ideally accompanied by a significant fundamental catalyst. However, an alternative approach would be to adopt a "range trading" strategy, involving buying at the support level and selling at the resistance level.
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