U.S. crude oil rose more than 1% on Thursday, one day after the Federal Reserve slashed interest rates for the first time in more than four years and as tensions in the Middle East continued to escalate.

The Fed surprised the market on Wednesday with a bigger-than-expected cut of a half percentage point. Oil prices, however, closed slightly lower as rate reductions had largely already been priced in.

The U.S. benchmark has now clawed back its losses this year, though it is still down more than 11% in the third quarter.

Phil Flynn, senior market analyst at the Price Futures Group, said the Fed cut appears to be “shaking out some hedge fund shorts from their bearish oil obsession.”

Here are Thursday’s closing energy prices:

• West Texas Intermediate October contract: $71.95 per barrel, up $1.04, or 1.47%. Year to date, U.S. crude oil is up less than 1%.
• Brent November contract: $74.88 per barrel, up $1.23, or 1.67%. Year to date, the global benchmark is down nearly 3%.
• RBOB Gasoline October contract: $2.06 per gallon, up 2.45%. Year to date, gasoline is down roughly 2%.
• Natural Gas October contract: $2.348 per thousand cubic feet, up 2.8%. Year to date, gas is down more than 6%.

Crude futures are on the rebound again as tensions soar between Israel and the Iranian-backed militia group Hezbollah in Lebanon. Prices are also finding support after U.S. oil stockpiles fell by 1.6 million barrels last week.

Israeli warplanes and artillery carried out strikes targeting Hezbollah in southern Lebanon on Thursday. The strikes come after pagers and walkie-talkies used by the militia exploded this week, killing dozens and wounding thousands across Lebanon. U.S. officials told NBC News that Israel was behind the pager attack. Israel has not taken responsibility for the attacks.

Israeli Defense Minister Yoav Gallant said Wednesday that his country’s focus is shifting from Gaza to the northern border with Lebanon, where some 60,000 Israelis have been evacuated, as a “new phase” of the war begins.

Oil market analysts have warned for months that an all-out war between Israel and Hezbollah, which until now have traded rocket fire, could force OPEC member Iran to directly intervene, raising the risk of disruptions to Middle East crude oil supplies.

“We continue to highlight Lebanon as the main pathway to oil disruption through direct Iranian involvement in a wider regional war,” Helima Croft, head of global commodity strategy at RBC Capital Markets, told clients in a Thursday note.

U.S. crude oil edged lower Wednesday with the Federal Reserve’s pivotal decision on interest rates later this afternoon unlikely to provide much in the way of support.

“In theory a rate cut is supportive for oil prices but we’ve seen prices rallying in recent days, likely pricing this in already, hence the response may be muted,” said Matt Smith, lead oil analyst for the Americas at Kpler.

The oil market has been rattled this month by worries about a growing imbalance between supply and demand. The U.S. benchmark is down about 13% in the third quarter, while global benchmark Brent has fallen about 15%.

Here are Wednesday’s energy prices:

• West Texas Intermediate October contract: $71.07 per barrel, down 12 cents, or 0.17%. Year to date, U.S. crude oil is down about 1%.
• Brent November contract: $73.45 per barrel, down 25 cents, or 0.34%. Year to date, the global benchmark has fallen more than 4%.
• RBOB Gasoline October contract: $1.9972 per gallon, down 0.23%. Year to date, gasoline has dropped about 5%.
• Natural Gas October contract: $2.297 per thousand cubic feet, down 1.16%. Year to date, gas has pulled back more than 8%.

Consumption in China is slowing as electric vehicle sales surge in the world’s largest crude importer. At the same time, OPEC+ is expected to increase production in December as output in the U.S., Canada, Brazil and Guyana remains strong.

“We are not expecting fireworks in the sky following Fed rate cuts,” said Manish Raj, managing director of Velandera Energy Partners. 

“The Fed action is unlikely to suddenly spur demand, which has otherwise been soft,” Raj said. “Nobody is hitting the gas stations just because the Fed decides to cut the rates today.”

Andy Lipow, president of Lipow Oil Associates, said a quarter-point cut is probably already priced into the oil market. “A 50 basis point cut is slightly supportive of the oil market since it translates into a weaker dollar and stronger prices for dollar denominated commodities,” Lipow said.

U.S. commercial crude stockpiles fell by 1.6 million barrels for the week ended Sept. 13, according to the Energy Information Administration. Meanwhile, gasoline inventories rose by 100,000 barrels, according to the data.

Geopolitical tensions are also escalating in the Middle East again as fears grow that a major conflict between Israel and the Iran-backed militia Hezbollah is on the horizon. Hundreds of pagers exploded in Lebanon Tuesday in an attack targeting Hezbollah militia members.

U.S. crude oil traded above $71 per barrel on Tuesday, as optimism grows that the Federal Reserve will cut interest rates this week and production is still disrupted in the Gulf of Mexico.

“Supply disruptions are making their mark, including Hurricane Francine’s impact on US Gulf of Mexico infrastructure,” said Svetlana Tretyakova, senior analyst at Rystad Energy.

“Expectations of a US Federal Reserve rate cut are gaining momentum, which could be good news for demand,” Tretyakova said.

Here are Tuesday’s energy prices:

• West Texas Intermediate October contract: $71.20 per barrel, up $1.11, or 1.58%. Year to date, U.S. crude oil is down about 1%.
• Brent November contract: $73.61 per barrel, up 86 cents, or about 1.18%. Year to date, the global benchmark has fallen nearly 5%.
• RBOB Gasoline October contract: $1.9929 per gallon, up 1.25%. Year to date, gasoline has declined more than 5%.
• Natural Gas October contract: $2.419 per thousand cubic feet, up 1.94%. Year to date, gas has pulled back nearly 5%.

More than 200,000 barrels per day remained offline in the Gulf as of Monday due to Hurricane Francine, according to the Bureau of Safety and Environmental Enforcement. Production from undamaged facilities will be brought back online immediately after checks have been completed, according to the agency.

The oil market is also bracing for the Fed’s decision Wednesday on interest rates. The central bank is widely expected to lower rates, though Wall Street is divided on the magnitude of the cut.

U.S. crude oil is down about 13% this quarter while Brent has fallen around 15% as demand slows in China, the world’s largest crude importer, and OPEC+ plans to increase production in December.

“Supply has been pretty strong,” Chevron CEO Mike Wirth told CNBC’s “Squawk on the Street” Tuesday.

“We’ve seen growth in supply primarily in the Americas,” Wirth said. “We’ve got OPEC with some capacity offline and demand has been a little less than most people expected as we see a slowing economy here, we’ve seen slower growth in China than I think most people expected.”

We suggested in August that traders who went short gold in May were beginning to consider covering their short positions.

The consolidation over the past few weeks has triggered short covering, but it has not encouraged new long positions.

When the gold price rebounds, it tends to do so rapidly without any consolidation activity. The gold price is characterized by trend rebounds from pivot point lows. Those are steep and rapid rebounds that have the characteristics of a short-term rally but also have a habit of developing into longer-term sustainable trends.

That has not developed. Gold made a plunging low in late August with a dip to $1,168. Historically, such dips have been followed by a rapid rebound, but that has not developed. Instead, there has been a period of sideways consolidation.

Evidence of a potential pivot point rally rebound includes two features.

The first bit of evidence would be a slowing of downward momentum. The range from low to high for the week is significantly smaller than the previous weekly ranges. That did develop.

The second feature indicating a potential rally would be a fast rebound with a significantly larger weekly low-to-high range: a large green candle that follows a very much smaller red candle. That did not develop and is the key clue to the continuation of the downtrend.

In other words, the consolidation pattern is a pause pattern rather than a reversal pattern.

The short-term group of averages in the Guppy Multiple Moving Average indicator were well separated. That shows traders are not optimistic about the potential for a trend change.

The long-term GMMA has crossed over and is continuing to develop steady separation. Those are bearish features that signal a continuation of the current downtrend.

The downside target is near $1,130 and is based on the value of the previous pivot point low rebound recovery in 2016.

Traders who covered shorts as the consolidation developed will now look to open short position again if the price dips below $1,180.

Traders continue to trade the retreat behavior. We use the ANTSSYS trading method for this.

Daryl Guppy is a trader and author of Trend Trading, The 36 Strategies of the Chinese for Financial Traders, which can be found at www.guppytraders.com. He is a regular guest on CNBC Asia Squawk Box. He is a speaker at trading conferences in China, Asia, Australia and Europe. He is a special consultant to AxiCorp.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.

A few weeks ago I noted the market contradiction between the and the .The stock market was making new 10-year highs but the currency was posting significant lows.

There was a contradiction, and a question arose: Who is the dominant partner in this relationship?

Well the answer is now in, and it’s the Australian dollar.

The collapse of the AUD pointed the way for the substantial retreat in the Australian market. As much as Australians like to think that U.S. President Donald Trump’s trade battles have no impact on their country, the reality is very different. Australia, a close ally of the U.S., is just so much collateral damage.

The Australian market is not immune from self-inflicted wounds, too. The misconduct in the banking and insurance sectors being revealed by the Hayne Royal Commission is undermining the companies that make up the bulk of the Australian market index.

Traders who were alert for evidence of a pullback in the Australian market went short as the Aussie dollar failed to hold support near $0.74. The AUD is a lead indicator for the Australian market.

The Australian dollar broke the long-term uptrend in April and quickly developed a substantial downtrend. It reached 12-month lows at $0.74 and rapidly reached two-year lows near $0.715.

A fall below $0.74 has a downside target near $0.715. That target is established using the support area tested in 2016 and 2017. The consolidation near $0.715 is weak. The short-term GMMA is well separated, suggesting that traders are committed sellers.

There is a low probability of a rally rebound toward $0.74. Traders fade the rally for a move toward the next support level near $0.69.

There is a weak relationship between Australian dollar weakness and U.S. dollar strength. Rather, the impact on the Australian dollar flows from revelations about the country’s financial sector and the fallout from Trump’s ramping up for tariffs. What hurts China hurts Australia and that’s before tariffs are directed specifically at Australia.

Daryl Guppy is a trader and author of Trend Trading, The 36 Strategies of the Chinese for Financial Traders, which can be found at www.guppytraders.com. He is a regular guest on CNBC Asia Squawk Box. He is a speaker at trading conferences in China, Asia, Australia and Europe. He is a special consultant to AxiCorp.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.

Hong Kong’s Hang Seng Index has broken two significant support features, suggesting a continuation of its downtrend —with a downside target near 25,200.

The Hang Seng has the appearance of a “head and shoulders” pattern, but that isn’t valid. The right shoulder of the pattern is created by just two days of activity. The reversal is too small and too brief to be considered as a left shoulder development.

The first significant support feature to be broken is the historical support resistance level near 28,000. That is the upper edge of a trading band projection. The lower edge of the trading is the current downside target level.

The price fall below 28,000 was not a clear fall. There was consolidation around this level, and the potential for a rally rebound to develop. However, the fall below the second support feature has confirmed the downtrend.

The second support feature is the uptrend line that is projected from the anchor points in February, July and December of 2016. This is a long projection of the trend line, but it can at times provide a future support level.

The current move is a fall below the line, followed by a small rebound and retest of the line as a resistance level. The second retreat from the line confirms the continuation of the downtrend.

It is significant that the value of the trend line matches the value of the support level and that increases the significance of the fall below the two features.

The downside target is set using the width of the trading bands. The 25,200 level has acted as a strong resistance level in 2014, 2015 and in 2017. Traders will watch for consolidation to develop near the 25,200 level.

We use the ANTSSYS trading method to extract good returns from the potentially fast fall as the retreat develops. Traders will cover shorts near 25,200. A move above resistance near 28,000 shows consolidation near that level, but it is not a signal for a new rally uptrend.

Daryl Guppy is a trader and author of Trend Trading, The 36 Strategies of the Chinese for Financial Traders, which can be found at www.guppytraders.com. He is a regular guest on CNBC Asia Squawk Box. He is a speaker at trading conferences in China, Asia, Australia and Europe. He is a special consultant to AxiCorp.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.

The breakout in the U.S. dollar appears to have slowed, so investors across the board are eager to determine if that is the end of dollar strength, or just a pause.

Before we get too carried away with the idea of a strong dollar it’s useful to look at the chart. The dollar index at 95 is not a strong dollar when compared to the December 2016 peaks around 103. It is, however, stronger than it was in March when it hammered out at a low near 88.

Currently, the dollar has reacted away from the relatively weak resistance level near 97. That is a technical resistance level calculated by projecting the trading band behavior. Using the same trade band projection methods, a breakout above 97 has a target near 99. That’s a stronger resistance target that is confirmed by previous price activity near the level.

The 97 level is a weak resistance level, so the pullback is not a reaction away from strong resistance. That suggests the pullback is more consistent with the normal rally-and-retreat behavior seen in any trend.

The key evidence that answers the question is found in the relationships within the elements of the Guppy Multiple Moving Average indicator.

Trend analysis is applied using the GMMA, which shows the uptrend is gathering strength.

There are three GMMA trend analysis features. The first feature is that the long-term GMMA has compressed and turned upwards. That is bullish.

The second feature is the way the price has clustered along the upper edge of the short-term GMMA as the rally developed. That further confirms uptrend strength.

The third feature is the way the short-term GMMA has moved above the long-term GMMA and also expanded. That shows traders are confident in the trend change. They enter the market as long-side buyers when weakness develops. That buying uses the lower edge of the short-term GMMA as a support rebound feature.

Those features — strong GMMA trend behavior and weak resistance — suggest it is easy for the dollar to develop more upside.

The upside targets are well defined using trading band analysis. Traders watch for consolidation and a rebound from 95 followed by a test of the upper edge of the trading band near 97. A breakout above that level has a trade band target near 99.

We use the ANTSSYS trading method to extract good returns from the potentially fast rally as the rebound develops.

Daryl Guppy is a trader and author of Trend Trading, The 36 Strategies of the Chinese for Financial Traders, which can be found at www.guppytraders.com. He is a regular guest on CNBC Asia Squawk Box. He is a speaker at trading conferences in China, Asia, Australia and Europe. He is a special consultant to AxiCorp.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.

A little over a month ago I wrote about NYMEX oil and suggested that the pullback was a buying opportunity. Investors watch for the opportunity to add to long positions as the price rebounds from any of the three support features on the oil price chart.

To date, the price has not rebounded. Does that analysis still hold as oil falls towards $65?

The short answer is “yes,” but with the repeated caveat that traders need to wait for evidence of a rebound before taking a long position. The analysis holds because the technical structure of the NYMEX oil market remains the same.

The fall below the long-term uptrend line is potentially bearish, but other features suggest the bear is not in command of the market. The future importance of the uptrend line is the way this will now act as a resistance level for future rallies.

Extending the line into the future suggests that it may be early 2019 before there is a serious challenge to the $76 price level. The extended line acts as a resistance level. That time frame changes if oil is able to move above the trend line and again use it as a support level.

The first support feature of the chart is the long-term support level near $65. That was the support base for the most recent strong rebound rally. That level is currently under test.

Oil has a well-established pattern of moving in trading bands around $11 wide. The current price activity is testing the lower edge of the trading band. Applying trade band projection methods gives a long-term target near $76. Achieving that target is hampered by the way the projected uptrend line now acts as a resistance level.

The second trend feature is shown with the Guppy Multiple Moving Average indicator. Despite the price retreat, the long-term group of averages is well separated, which shows strong and consistent investor support for a rising trend. When price retreats, then investors come into the market as buyers. This is the most consistent trend support behavior shown in the GMMA indicator on the oil chart in nearly a decade.

Compression in the group shows the development of a trend change and compression is currently not developing.

The degree of separation between the long-term and short-term GMMA is largely steady. The consistent degree of separation is a characteristic seen with stable trends, which again suggests that the current extended retreat is temporary rather than the beginning of a trend change.

The short-term group of averages reflects the way traders are thinking and its shows an appetite for short-term trade opportunities.

Those support features and the trend strength features all continue to suggest that the oil price is experiencing a temporary retreat. The longer-term trading band target is near $76, but it may take four or five months to achieve.

We use the ANTSYSS trade method to extract good returns from this trend behavior.

Daryl Guppy is a trader and author of Trend Trading, The 36 Strategies of the Chinese for Financial Traders, which can be found at www.guppytraders.com. He is a regular guest on CNBC Asia Squawk Box. He is a speaker at trading conferences in China, Asia, Australia and Europe. He is a special consultant to AxiCorp.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.