- The threat to the US-China trade deal confronts political tension between the US and Iran.
- Weekly inventory report from the API will also be in the focus.
Despite bouncing off 50-day and 200-day SMA confluence, WTI increase seems capped by a short-term descending trend-line near $62.50 on early Tuesday as bulls and bears jostle over the news concerning the US-China trade deal and the US troops sent to Iran.
As per the Reuters’ news report, the US sent a carrier strike group and bombers to Iran to counter “credible threat by Iranian regime forces” during Monday. It was also reported that the US Secretary of State Mike Pompeo sees an escalation of the US-Iran tension.
The energy benchmark took advantage of the news report to reverse previous losses and take a U-turn from 50-day and 200-day simple moving average (SMA) confluence region near $60.50.
The black gold’s recovery remained under pressure after another news report from the Reuters mentioned that the US lawmakers support the President Trump’s threat to levy tariffs on China in case of a failed trade meet with China by Friday.
In addition to developments surrounding the US-China and the US-Iran catalysts, a weekly release of private survey conveying the US crude oil stock from the American Petroleum Institute (API) will also grab market attention. The inventory level grew to 6.81 million in its latest release.
Technical Analysis
While a successful break of $62.50 can trigger the black gold’s recovery to $64.00 and $64.80, 50-day SMA level of $60.80 and 200-day SMA near $60.55 can challenge sellers targeting $59.80 and $57.89.
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