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BRN hovers above 200-period SMA ahead of US PCE

BRN hovers above 200-period SMA ahead of US PCE

BRN bulls are trying to keep the BRN above the 200-period SMA (~$81.378).

The upward momentum comes amid the strong expectation for the Fed to start cutting interest rates in March.

A drawdown (-6.7M bbl) in the US stockpiles along with incoming policy support for the Chinese economy and still persistent geopolitical tensions in the Middle East have also contributed for the upswing in oil prices.

However, BRN bulls’ ability to stay above the 200-period SMA (~$81.378) may yet be tested.

  • If today’s PCE data prompts markets to expect a lower chance that the Fed will begin cutting rates in March, oil prices may retreat towards or even below the $80/bbl line
  • A decrease in the PCE value may strengthen the market’s belief for the rate cut in march. This could translate in to BRN moving higher, towards the 100-period SMA (~$83.388)

Other major catalysts which could determine the BRN's trajectory include FOMC meeting and US employment data scheduled for next week.


On the technical side …

  • 200-period SMA (~$81.378) is set to offer an immediate support, followed by the psychologically important $80/bbl
  • Next potential resistance level may be set at 100-period SMA (~$83.388), followed by $83 round number
  • RSI positioning at 60.57 underlines a cautiously bullish approach as investors await for further key macroeconomic reading

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