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WTI stays firm at around $74.00 despite a strong US Dollar

  • Western Texas Intermediate recovers some ground even though the US Dollar remains buoyant.
  • IEA’s Director commented that China’s reopening would drive oil prices.
  • WTI Technical Analysis: Triple bottom looms around $72.50.

US crude oil benchmark known as Western Texas Intermediate (WTI) records minimal gains after diving toward an eight-week low at $72.30 per barrel on Monday, exchanging hands at around $73.96 per barrel, capped by a strong US Dollar (USD) across the board.

Wall Street’s extended its losses on Monday due to market participants repricing a less dovish Federal Reserve (Fed) as expected. Money market futures estimates 50 bps of rate hikes by the US central banks, which would lift the Fed Funds target to the 5%-5.25% range. Hence, the greenback continues to extend its recovery, as shown by the US Dollar Index, a measure of the buck’s value against a basket of six currencies, up 0.69%, at 103.703.

Since last Friday, WTI has slid 3%, following the robust US employment data.

Even though a strong US Dollar is a headwind for the “black gold,” China’s reopening prospects remain a driver for oil prices, as the International Energy Agency (IEA) Executive Director Fatih Birol reported. Birol commented that producers might reconsider their output policies as China’s Covid-19 relaxation would increase demand for crude. He added, “We expect about half of the growth in global oil demand this year will come from China.”

Oil traders should be aware that price caps on Russian products began on Sunday, as G7 nations, the EU and Australia, agreed on price limits of oil-refined Russian products.

WTI Technical Analysis

Technically, WTI is still downward biased as long as the quote stands below $82.00 PB. Additionally, last Friday’s WTI failure to crack the 20-day Exponential Moving Average (EMA) at $77.65 exacerbated oil’s fall toward the year’s lows, at $72.30, breaking below the January 4 low of $72.50.

Nevertheless, since then, oil has rebounded and is aiming toward the $73.80 area, opening the door for a leg up. Hence, WTI’s first resistance would be $74.00. A breach of the latter will expose the 20-day EMA at 77.64, followed by the $78.00 psychological level, ahead of the 50-day EMA at $78.77. Conversely, WTI’s would resume downwards once it breaks beneath $72.30.

WTI US OIL

Overview
Today last price74.31
Today Daily Change0.86
Today Daily Change %1.17
Today daily open73.45
 
Trends
Daily SMA2078.81
Daily SMA5077.65
Daily SMA10081.12
Daily SMA20090.77
 
Levels
Previous Daily High78.18
Previous Daily Low73.36
Previous Weekly High80.61
Previous Weekly Low73.36
Previous Monthly High82.68
Previous Monthly Low72.64
Daily Fibonacci 38.2%75.2
Daily Fibonacci 61.8%76.34
Daily Pivot Point S171.81
Daily Pivot Point S270.17
Daily Pivot Point S366.99
Daily Pivot Point R176.63
Daily Pivot Point R279.82
Daily Pivot Point R381.45

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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