Crude Oil Rallies Amid Fed Rate Cut and Global Stimulus Efforts

WTI Crude Oil futures rallied alongside global risk assets yesterday in a widespread bounce-back from Tuesday’s post election volatility.

The Federal Reserve lowered discount rates by 25bps yesterday, a move that was widely expected for some time. What was not necessarily expected was the shift in tone out of the Fed. The written statement, which is closely eyed by market participants, featured a quite hawkish shift in verbiage. After two months of strong U.S. economic data and a sharp rise in longer term interest rates, it would appear that inflation is back at the forefront of the Fed’s decision making process.

The dollar retraced a large portion of it’s Tuesday rally which eased pressure on the commodity space. Heading into the U.S. open the dollar is once again showing strength [U.S. Dollar Index Chart shown below]. WTI Futures are lower by -1.23 [-1.71%] to 71.12.

China unveiled more stimulus measures last night, and Chinese equity markets are once again posting strong gains. This comes despite the election of Donald Trump and a horizon filled with headwinds, making the price action appear quite bullish.

{US Dollar Index Chart:}

WTI Crude Oil futures are consolidating in a very healthy manner above the 50-day moving average and touched the highest level since October 14th yesterday. However, the tape has certainly lacked follow though and one could even say failed to do such against major three-star resistance at 72.21-72.67. Price action has surrendered our Pivot and point of balance at 71.60 and must respond to first key support at…

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