U.S. crude has posted gains on Tuesday, after six straight losing sessions. Currently, crude is trading at $58.64, up $0.54 or 0.93%. Brent crude is trading at $64.93, up $0.71 or 1.09%.
Chinese Oil Imports Rise
Despite the toll of the ongoing trade war with the U.S., Chinese crude imports climbed by 9.5% in 2019, compared to a year earlier. China’s trade balance was released earlier on Tuesday, and the trade surplus improved to 329 billion yuan ($46.8 billion) in December, up sharply from 274 billion yuan ($38.7 billion) a month earlier. This has helped push crude prices higher on Tuesday.
Crude Briefly Drops Below $58
Investor risk appetite has made a fast recovery after the recent showdown between the U.S. and Iran raised fears of war in the Middle East and sent crude above $65 per barrel. However, Iran and the United States both stepped down and tensions have significantly eased. With no immediate danger to crude production or supply routes, oil prices have taken a tumble since last week. In the Asian session, U.S. crude slipped below the 58.00 level, before recovering.
U.S. Inflation Dips
The U.S. economy has been performing well, but inflation remains below the Federal Reserve target of 2.0 percent. Consumer inflation has been losing ground and the downturn continued in December. CPI slowed to 0.2%, compared to 0.3% a month earlier. Consumer spending will be in the spotlight on Thursday, with the release of retail sales, the primary gauge of consumer spending. Retail sales are expected to improve to 0.3%, while core retail sales are projected to jump by 0.5%.
The line of 58.75 remains relevant. Currently, it is an immediate resistance line which could be tested in the North American session. The 50-EMA line is close by, at 59.07. This is followed by resistance at the round number of 60.00. On the downside, there is support at 58.00. This is followed by a support level at 57.25, which has held since December 3.
This article was originally posted on FX Empire
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