USOIL:$78 next week is crucial
Updated
On Tuesday this week, the testimony of the Chairman of the Federal Reserve before Congress raised concerns about risk assets in the market. In this testimony, Powell stated that "if it is necessary, the Federal Reserve is prepared to speed up the pace of interest rate hikes, and terminal interest rates may be higher than expected." These words indicate that the Federal Reserve not only did not cool down the rising expectations for interest rate hikes over the past month, but also further pushed up the expectations for interest rate hikes.
Powell's speech caused shock in the market, as the market saw from Powell's speech a determination to lower the inflation rate at the cost of suppressing demand and employment. On that day, the US dollar index soared, risk appetite deteriorated, and US stocks fell sharply, accompanied by a sharp drop of 4% in oil prices from above $80 per barrel.
However, there was a reversal in oil prices on Friday. After testing the support at $74.5, the market quickly rebounded above $76 and successfully stabilized. Our long position in crude oil at $75 also reached the first take-profit level smoothly. However, there is still a certain distance from the recent high of $80, and the upper resistance level to watch is in the 76-78 area. This dense resistance area may limit the upward space. But if it breaks through $78, there will be an opportunity to challenge the $80 level again. Let's keep an eye on it, and I will update the trading strategy in a timely manner.
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