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Sharp drop in crude oil – China shifts to Iran for oil supplies!

Crude oil is trading sharply bearish today and has already dropped more than 100 pips over technical and fundamental reasons. Let’s look at them:

1) We are already aware of the ongoing trade war between China and the US, due to which Chinese buyers of Iranian oil are beginning to move their cargoes to vessels owned by National Iranian Tanker Co (NITC) for almost all of their imports to keep the supply flowing. Despite the recent sanctions on Iran by the US and Eurozone, China seems to buy oil from Iranian companies to meet its oil demands.

Crude Oil - Daily Chart

Crude Oil – Daily Chart

2) Secondly, if you look at the daily chart of crude oil, you will notice it has tested the long-term upward trendline which was earlier violated at $66.35. Now the same support level is working as a resistance. Crude oil can face an immediate resistance near $65.20 and $64.67. Whereas, the bearish trend remains strong.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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