Oil Sheds Over 3% In Just Two Trading Days On Positive Signs About Gaza Ceasefire Talks

Oil retreats for a third consecutive session as tail risks for the commodity ease further. Israel’s Prime Minister Benjamin Netanyahu has confirmed he supports the ceasefire proposal US Secretary of State Antony Blinken has put forward, according to a report from Bloomberg. Even though Hamas still has to have its say about the agreement, the news means a substantial easing in tensions in the MIddle East, avoiding for now any supply disruptions from the region. Meanwhile, traders are adding the US to the list of countries that see sluggish demand for Oil after China was top of the list already earlier with economic activity easing further.  The US Dollar Index (DXY), which tracks the performance of the US Dollar against six major currencies, is easing as well on the back of that assumption that the US economic growth is softening. Markets first feared a recession, though they now seem to embrace the narrative again of a soft landing for the US economy. This narrative, however, hinges on Federal Reserve Chairman Jerome Powell, with markets hoping he will confirm on Friday at the Jackson Hole Symposium that they have got it right this time. At the time of writing, Crude Oil (WTI) trades at $73.05 and Brent Crude at $76.76. Oil news and market movers: Easing demand from China

 Oil Technical Analysis: On its wayOil is setting forth its correction as it has entered the $72-region. The move still has more room to go with the Relative Strength Index (RSI) telling sellers that it is not the end of the line just yet. More downside means at least a test towards $70.00, which could be the line in the sand for hedge funds that are still holding on to long positions bought on the speculation of Middle Eastern turmoil. On the upside, it becomes very difficult to be bullish with a lot of resistance levels nearby. The first element to look out for is the pivotal $75.27. Next up is the double level at $77.65, which aligns with both a descending trendline and the 200-day Simple Moving Average (SMA). In case bulls are able to break above it, the 100-day SMA at $78.45 could trigger another rejection as it did last week.  On the downside, the low from August 5 at $71.17 is the best level for a bounce. It might not be bad to start considering levels below $70.00 in case ceasefire talks reach a breakthrough and hedge funds start selling their speculative stake in Oil contracts. The $68.00 big figure level is the first level to watch followed by $67.11, which is the lowest point from the triple bottom seen back in June 2023.  More By This Author:Oil Stays Flat Ahead Of API Release Later This TuesdayUS Dollar Rolls Through Markets, Fueled By Gains Against Yen EUR/USD Flirts With Break Below 1.09 While Greenback Sets The Record Straight