WTI discovers support near $80 ahead of Fed policy
|![WTI discovers support near $80 ahead of Fed policy](https://editorial.fxstreet.com/images/Markets/Commodities/Energy/Oil/petrol-filling-station-gm516732777-48350640_Small.jpg)
- WTI attempts recovery from $80.50 in hopes that the Fed will keep interest rates unchanged.
- The US Dollar Index gathers strength to extend recovery ahead of Fed policy, US labor, and factory data.
- Oil prices managed to recover despite weak Caixin Manufacturing PMI data.
West Texas Intermediate (WTI), futures on NYMEX, find bets near $80.50 on expectations that the Federal Reserve (Fed) will keep interest rates unchanged in the range of 5.25-5.50%. The Fed is widely to keep policy steady due to a gradual decline in consumer inflation and higher US long-term bond yields, which are impacting business investment and overall spending.
Considering the strength in the US economy due to robust consumer spending, strong labor market conditions, and a potential recovery in factory activities, the Fed would keep doors open for further policy tightening.
The US Dollar Index (DXY) gathers strength to extend recovery toward the crucial resistance of 107.00 Apart from the Fed’s monetary policy, the US Dollar would face volatility after the release of the private payrolls data and the ISM Manufacturing PMI for October.
Meanwhile, deepening Middle East tensions have also improved the oil demand. The Israeli army is planning a ground attack in Gaza to dismantle Palestine's military troops. Israel seems not in the mood for a ceasefire against Hamas and the likelihood of Iran’s intervention is high.
The oil price managed to recover despite weak Caixin Manufacturing PMI data for October. S&P Global reported that China’s factory activities unexpectedly dropped in the contraction zone to 49.5 against expectations of 50.8 and the former reading of 50.6. This has elevated global slowdown fears.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.