WTI Price Analysis: On the verge of a breakdown near $81.50
|- The oil price is on the verge of delivering a breakdown ahead of the US Retail Sales data.
- US consumer spending momentum expanded at a higher pace of 0.4% vs. the former pace of 0.2%.
- A confident breakdown of the Rising Channel pattern will trigger a bearish reversal.
West Texas Intermediate (WTI), futures on NYMEX, skid below the $82.00 support and expose to further downside. The oil price faces significant selling pressure after printing a fresh eight-month high of around $84.85 as a moderate increase in the United States inflation would force the Federal Reserve (Fed) to keep interest rates higher for a longer period.
The oil price could resume its upside journey as Saudi Arabia considered an oil support cut to achieve price stability in the oil market.
Meanwhile, the US Dollar Index (DXY) struggles to maintain an auction around 103.00 ahead of the US Retail Sales data for July. As per the estimates, consumer spending momentum expanded at a higher pace of 0.4% vs. the former pace of 0.2%.
The oil price is on the verge of delivering a breakdown of the Rising Channel chart pattern formed on a two-hour scale. A confident breakdown of the aforementioned chart pattern will trigger a bearish reversal, which will strengthen bears. The 50-period Exponential Moving Average (EMA) at $82.23 is consistently acting as a barricade for the oil bulls.
The Relative Strength Index (RSI) (14) slips into the range of 20.00-40.00, which indicates an activation of a bearish impulse.
A downside move below August 1 low at $80.40 would drag the oil price toward August 3 low at $78.50, followed by July 24 low at $76.38.
In an alternate scenario, a recovery move above April 14 high near $82.50 would drive the asset toward April 10 high at $84.32. Breach of the latter would expose the oil price to a fresh nine-month high near $86.00.
WTI two-hour chart
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