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WTI remains defensive around $51.80 despite geopolitical tensions

  • Global growth worries take over geopolitical tension.
  • Descending trend-line, 200-week MA limit immediate upside.

Despite latest negative news concerning the US-Iran geopolitical tussle, WTI remains defensive under 4-week old descending trend-line while trading near $51.80 at the initial Asian session on Tuesday.

The US recently sent additional 1,000 troops to the Middle East in order to counter threats from Iran after recently alleging the OPEC member’s role in the Oman attacks.

Though, the black gold showed little reaction to the news. The reason could be likely chances of increased global economic damages due to the on-going trade tussle between the US and China.

While Bloomberg’s news report suggesting a decline in China’s holding of the US Treasuries raised fears for further escalation in the trade war, the American Chamber of Commerce said that the US and China need to agree over the trade deal in G20 and end the public blame game.

Other than political plays, today’s API weekly crude oil stock report will also gain traders’ attention. The private industry survey is scheduled to release the inventory report for the week ended on June 14 with the prior release being +4.85 million.

Technical Analysis

While a downward sloping trend-line since late-May limits the energy benchmark’s immediate upside near $52.20, 200-week EMA near $52.65 seems additional upside barrier to watch, a break of which can trigger the quote’s rise towards $54.50.

Meanwhile, longer-term support-line near $51.00, followed by $50.50 – $50.00 horizontal area, could keep limiting adjacent declines ahead of shifting bears’ towards 26 November low near $49.44.

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