Crude Oil Steady Ahead of China Data

Commentary: Crude oil is kicking off the week slightly to the upside, as prices continue to consolidate recent gains that have established prices at or above the triple digit threshold. Key economic data will be reported in the coming week, the most important of which is the China Consumer Price Index for January. Expectations are for a 5.4% year-over-year increase, up from 4.6% in the prior month and the highest YoY reading since July, 2008. China has already raised interest rates three times since October in an effort to combat rising inflation. Markets will be closely examining the latest CPI report to gauge whether more rate hikes are in the offing.

Technical Outlook: Prices are testing support at the January low near $85. A break through this juncture would amount to a significant bearish reversal, opening the door to longer-term selling. Near-term resistance lines up at $88.06, the 61.8% Fibonacci retracement of the rally from January’s low.

(Source: http://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2011/02/14/Crude_Oil_Steady_Ahead_of_China_Data_Gold_Tests_1353_Support.html)