WTI Price Analysis: WTI lost momentum and got rejected at the 20-day SMA
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- WTI failed to surpass the 20-day SMA at $70.29 and then stabilized around $69.75.
- US reported that GDP from Q2 was revised upwardly to 2% (annualized).
- Jobless Claims from the third week of June dropped to 239k.
The price of West Texas Intermediate (WTI) got rejected at the 20-day Simple Moving Average (SMA), currently positioned at $70.36 and retreated to $69.75, as weak housing data from the US soured the market’s mood. On the positive side, robust economic data from the United States made the WTI find demand. However, the USD’s strength on the back of higher yields will limit the black gold’s upwards movements.
Oil prices favored by robust economic data from the US, eyes on PCE data
The US Bureau of Economic Analysis released positive news regarding the Gross Domestic Product (GDP) in the United States for the first quarter, revising it upwards to an annualized rate of 2%, indicating the resilience of the American economy. Additionally, Jobless Claims for the week ending June 23 dropped to 239K, surpassing both market expectations and the previous figure of 265K. In that sense, the larger-than-expected drop in Oil stocks reported by the US Energy Information Administration (EIA) on Wednesday and the strong economic data from the US are supporting the WTI.
On the negative side, Pending Home Sales from the US declined by 2.7% in May vs the 0.2% expansion expected, which soured the market's mood. In addition, traders should be aware of Friday’s Core Personal Consumption Expenditures (PCE) data from the US – the Fed’s preferred inflation gauge. That being said, adding to the strong economic data, hot PCE figures may be additional excuses for the Federal Reserve (Fed) to continue hiking, and that shouldn’t be good news for Oil prices.
WTI Levels to watch
According to the daily chart, the near-term outlook for WTI is neutral. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are flat, suggesting that there is no clear dominance.
Looking at the downside, support levels are identified at $69.00, followed by Wednesday’s low of $67.10 and the $66.50 zone. On the other hand, the first level to retake is located at the 20-day Simple Moving Average (SMA) of $70.36. If the price surpasses this level, the next resistance areas are around $70.50 and the psychological mark of $71.00.
WTI Daily chart
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