In what was certainly an about-face, Crude Oil staged a huge rally on Tuesday. Prices rose by nearly 4%, which is a big day out for sure.

There are a few reasons for the rally:

• The Chinese Leader blinked first in the trade war battle with Donald Trump.
• Trump was strong on a chemical attack in Syria.
• The US gave the EU a deadline to redo an agreement with Iran.

This saw us breakout to the upside. That was until we saw a surprise build in inventories from the API in late trade. That put a bit of a dampener on the move.

Eyeing Resistance

The resistance level at 66.00 is now where we are firmly focused on. It wasn’t long ago that it looked rock solid and price sold right off. Now that’s not the story.

There is now a high probability of a test and move through 66.00 again. So I’ll be looking for a stop run as the type of trade to use on Wednesday.

Of course, we get official Crude Oil stocks data from the EIA which might slow things down if we get another build. If it’s a draw, then look out above.

Crude Oil – 240 min Chart.