By Deepak Rangan
Crude oil prices are facing strong resistance from the $103-$105 level. And even though fundamental factors are very bullish for oil prices, this resistance zone has thwarted any further advance for the past 2 months.
Fundamentals
-EU decided to ban oil imports from Iran, with effect from July 01 2012
-South Sudan's oil exports have been blocked by its neighbour Sudan
-US economic indicators have been beating market expectations
-China's growth, though slow, has been in line with investor expectations
-Saudi Arabia clearly wants oil price around $100/barrel, as stated by Oil minister Al-Naimi.
Technically, watch out for the long-term resistance line (orange) and the horizontal resistance (red). The RSI is exhibiting a negative divergence, at a time when two consecutive price peaks were at nearly the same level. This is a bearish indication. Major support is seen at $90/barrel.
Note: This analysis is only meant to assist your trading decision, should not be mistaken as an independent trading advice. Trading decisons should be taken only on personal research and trade methodologies.
