Weak USD & Fresh China Measures Supporting Crude

Oil Rallies on Weak USDOil prices are climbing on Thursday following the July FOMC yesterday which has seen USD coming under fresh selling pressure. Crude futures are now trading back up towards the week’s highs, their highest level in 3 months, as a weaker Dollar drives demand for commodities. With the market no longer pricing in a further rate hike from the Fed this year, instead eyeing rate cuts early next year, USD looks likely to remain pressured moving through the second half of the year. This creates a supportive backdrop for crude, alongside the recent OPEC+ production cuts we’ve seen.Market Shrugs Off EIA Data – China Measures HelpYesterday, the EIA reported a smaller-than-forecast drawdown of -0.6 million barrels vs -2.2 million barrels expected. However, given the backdrop of a weaker Dollar currently, the data failed to turn crude prices lower. Additionally, news of further economic support measures in China this week are also helping underpin oil prices. While China has stopped short of announcing a full fiscal package, additional smaller measures have helped lift sentiment.  With this in mind, the near-term crude outlook remains bullish for now with focus on a further break higher.Technical ViewsCrudeThe breakout above the bear channel highs and the 72.61 level opens the way for a continued push higher. With momentum studies bullish, the focus is on a test of the 82.59 level next. This is a major resistance level for the market and a break higher here will be firmly bullish, putting focus on 93.47 above as the longer run level to note.