WTI Price Analysis: Responsive buy sends oil near four-day high around $77.00
|- Oil price has reached near four-day high around $77.00 amid escalating supply worries.
- The 50-period EMA) at $76.65 is barricading the oil price.
- A range shift move by the RSI (14) indicates a bullish reversal.
West Texas Intermediate (WTI), futures on NYMEX, have scaled to near four-day high around $77.00 after a healthy responsive buying from near $74.00. The oil price has ignored the rising hawkish Federal Reserve (Fed) bets after a revival in the United States’ household spending. The catalyst that is infusing strength in the oil price is the supply cut by Russia after sanctions from western allies to trim its funding for arms and ammunition for the invasion of Ukraine.
Volatility in the US Dollar Index (DXY) has squeezed dramatically, however, the upside is still favored as Fed policymakers are reiterating a hawkish stance to tame the stubborn inflation.
On a four-hour scale, the oil price has formed a Head and Shoulder chart pattern that conveys a sheer consolidation and results in a downside break after surrendering the neckline. The neckline of the aforementioned chart pattern is plotted from January 5 low at $72.64.
The 50-period Exponential Moving Average (EMA) at $76.65 is barricading the oil price, at the time of writing.
Meanwhile, the Relative Strength Index (RSI) (14) has delivered a range shift move from the bearish range of 20.00-40.00 to the 40.00-60.00 range, indicating a bullish reversal. The RSI (14) has taken support at 40.00.
A responsive buying in the oil price favors an upside to near February 3 high around $78.18 and round-level resistance of $80.00 after surpassing a four-day high around $77.00 decisively.
In an alternate scenario, a confident break below the H&S neckline will drag the asset towards December 9 low at $70.27 followed by September 2021 low around $67.00.
WTI four-hour chart
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.