Crude Oil Forecast: Key Levels Ahead of FOMC and NFP Week

Key Events for the Week Ahead

• FOMC meeting (Wednesday)
• Crude oil inventories (Wednesday)
• ISM manufacturing PMI (Thursday)
• Non-Farm Payrolls (Friday)
• OPEC online monitoring meeting - market pulse check (August 1st)

US GDP Resilience

The US GDP showed resilience with a higher-than-expected reading on Thursday, surpassing the first quarter GDP of 2024 and offsetting the bearish sentiment stemming from the Chinese economy on oil charts.

Crude Oil Inventories

Additionally, the consecutive four-week decline in crude oil inventories has contributed to halting the recent downtrend, reflecting strength alongside the latest GDP figures during the summer season.

Upcoming Economic Indicators

Next week’s focus will be on the leading growth indicators of the US economy, providing early signs for developing growth metrics as recession warnings have surfaced this week. The ISM manufacturing PMI is watched on Thursday and the final share of volatility for the week lies with the non-farm payrolls.

Monetary Policy and Market Volatility

Following today’s PCE data, the Fed’s FOMC statement is expected to inject volatility into the markets after a weaker-than-expected week driven by disappointing earnings and an uncertain economic and political atmosphere.

Crude Oil Forecast: USOIL – 3-Day Timeframe – Log Scale

Source: Tradingview

Oil’s consolidation seems to be getting narrower, similarly reflected on the relative strength indicator as well. Oil is still expected to retest the lower border of the consolidation range after completing its potential bullish retracement.

A break below the latest low of 75.90 could potentially resume the overall downtrend in oil.

Projected Resistance levels

• Within the consolidation: 81 and 83.40
• Above the consolidation: 85 and 87.30

Oil is still expected to retest the lower border of the consolidation range after completing its potential bullish retracement. A break below the latest low of 75.90 could potentially resume the overall downtrend in oil.

Projected Support levels

• Within the consolidation: 75.90 and 74
• Beyond the consolidation: 72.70 and 69-70

--- Written by Razan Hilal, CMT