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It has been a good few weeks for US light crude, as the commodity surged from its January nadir to reach its highest point since mid-October 2013.
Jitters surrounding emerging markets abated, despite the growing turmoil in places such as Ukraine and Venezuela. Risk assets saw gains as investors began to worry less about continued Federal Reserve tapering.
In recent days, crude has failed to make much headway, hurt by a disappointing run of economic data this week (the German ZEW, European PMIs, poor US housing data and a sharp drop on the Philadelphia Fed index), and it has also become overbought on the 14-day relative strength index.
This perhaps suggests that the gains have run their course for the time being, but on an hourly chart we can see the 50-, 100- and 200-hour moving averages are all still pointing upwards. Twice in the month we have seen US crude pause for breath before moving upwards. Economic data will remain the key determinant, but the level to watch out for is $104.30 as resistance (the October 2013 high), while the ascending trend from $91.42 should provide a degree of support.