Crude Breaks Out As China Announces Fresh Econ Support

Oil On the RiseCrude prices were seen breaking out to their highest levels in over 3 months yesterday. The rally came amidst the broad uptick in risk appetite we saw in response to the Chinese Politburo. With Chinese leaders once again promising support for the economy. While the statement read out on the back of the meeting fell short of promising a much-anticipated fiscal package, traders were encouraged by news of smaller measures including an easing of restrictions in the property sector.Stimulus ExpectationsSpeculation of a forthcoming stimulus package from the Chinese government has been a key market focus point this year and has at time helped underpin oil prices. Given that the health of the Chinese economy is firmly tied to the demand outlook for oil, news of further measures aimed at supporting Chinese activity has been welcomed by crude bulls this week. Whether this positive impact lasts is yet to be seen, however.Fed On WatchFocus will now turn to the Fed tomorrow and the path of USD. The best outcome for crude bulls would be either the Fed keeping rates unchanged or hiking while signalling that no further tightening is expected. This should see USD heavily sold, helping lift crude prices near-term.Technical ViewsCrudeThe rally in crude prices has seen the market breaking out above the 72.61 level and above the bear channel highs. The subsequent retest of this zone has held for now, keeping the focus on higher prices. 82.59 will be the next hurdle for bulls.