- WTI extends the previous day’s losses from $42.79, recently bounces off the intraday low.
- US-China and Washington-Ottawa tussles join dimming hopes of US stimulus to weigh on the risk-tone.
- US dollar pullback adds burden onto the commodities ahead of the American jobs report.
WTI bounces off intraday low to trade near $42.07, down 0.10% on a day, while heading into the European open on Friday. In doing so, the black gold adds to Thursday’s losses as risk-tone sours following the US announcements of fresh punitive measures on Canada and China. The mood gained extra dullness as American Senators failed to agree over the much-awaited stimulus.
Earlier in Asia, US President Donald Trump recalled tariffs on Canadian aluminum and pushed Ottawa to retaliate with the exact time by 15:00 GMT. Following that, the Republican leader signed an executive order to raise bars for the US businesses connecting to China’s TikTok and WeChat. Such actions are considered severe for risk as global markets are combating with the coronavirus (COVID-19) and any trade negative measures will add burden during the tough time.
On the other hand, Democrats and Republicans couldn’t unveil details of jobless claims benefits nor the phase COVID-19 aid bill. The disagreement pushed Senate Republican Leader Mitch McConnell to insist negotiations during the generally followed August vacation. President Trump, however, has already suggested using executive powers to roll out employment claim benefits soon.
Talking about the data, China’s trade balance and export figures flashed upbeat signs but soft imports seem to gain major attention. On the contrary, second-tier data from Japan and Germany print welcome numbers to provide the latest pullback in oil prices.
Looking forward, traders will keep eyes on the US employment numbers for July as early indicators have been disappointing. Also in the line will be the Baker Hughes US Oil Rig Counts, prior 180.
Technical analysis
A one-week-old support line can offer immediate rest, near $41.00, before highlighting a $40.00 threshold. Until then, the bulls can keep aiming for February month’s low near $44.00 with $43.60 acting as a nearby upside barrier.
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