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  • WTI shrugs off geopolitical tension surrounding Syria and Hong Kong amid the US-China trade war.
  • Month-start PMIs, trade headlines should be watched on the US holiday.

With the US-China trade tussles outshining major catalysts, WTI remains below the 21-day simple moving average (DMA) while taking rounds to $54.75 during early Asian session on Monday.

The energy benchmark fails to portray geopolitical tension in Syria wherein the US attacks in Syrian’s Idlib catches an ire from Russia as saying the nation didn’t provide any notice and broke the ceasefire. Protests in Hong Kong and Iran’s preparations to counter the US, if at all there is a war, becomes additional geopolitical catalysts that couldn’t trigger price rise.

The US remained firm on its stand to levy fresh tariffs on China, activated from September 01, even if China stepped back from retaliatory measures before this month’s anticipated trade talks. Chinese media continues to dim prospects of any breakthrough of the US-China trade relations in the upcoming meet while the US President Donald Trump doesn’t want to relinquish control over the trade reins.

It should also be noted that the inversion of the US 10-year and two-year Treasury yields also adds worries to the energy traders as it signals global recession.

Moving on, the black gold is likely relying on the month-start manufacturing purchasing managers’ index (PMI) data from China, Japan and the UK for fresh impulse while the US markets are off due to the Labor Day holiday.

Technical Analysis

Only if the quote successfully rises beyond 21-DMA level of $54.85, it can aim for 50-DMA level of $56.40, else a month-old ascending trend-line at $54.00 and August 26 low near $52.90 can flash on sellers’ radar.