October crude oil tested support at the 50 DMA (44.96) on Monday, September 12, 2016, trading down to 44.72 and then turning around and rallying to 46.51 as Equity markets rebounded on dovish comments by Lael Brainard. Her comments lowered the chances for a rate hike from the upcoming FOMC meeting next week.
She is the last Fed speaker as the Fed now goes into their blackout mode ahead of the meeting next Tuesday and Wednesday. With Eric Rosengren’s hawkish comments on Friday negated by her comments, (she has a lot of influence during the FOMC meetings), her stance on rates puts the surprise back into a rate hike.
If Janet Yellen puts through a hike in rates next week, the markets most likely will not react well to the hike, in my opinion. The US dollar declined on her comments and any further decline in the dollar could send crude oil higher.
The Monday high failed just above the 21 DMA (46.39) and a rally above the high could lead to a test of the trendline at 47.41 and then the September 8 high at 47.75. Support is at the 8 DMA at 45.34 and then the 50 DMA. Trendline support is at 44.28.
| High | 46.51 |
| Low | 44.72 |
| Last | 46.06 |
Daily Pivot Points for 9/13/16
| R2 | 47.55 |
| R1 | 46.81 |
| PIVOT | 45.76 |
| S1 | 45.02 |
| S2 | 43.97 |