WTI bears look for a downside continuation for the days ahead

WTI bears are moving in at a critical juncture.
A break of horizontal support leaves the downside exposed.

Ross J Burland FXStreet

West Texas Intermediate is higher on the day so far, up over 2.45% at the time of writing, having ranged between a low of $76.03 and $79.61 so far. The price has been consolidating at the top of a channel and the prior day's short squeeze. Risk markets were soft amid light activity as month-end approaches.

Meanwhile, West Texas Intermediate was bid on the hopes China is easing its strict zero-Covid policies while OPEC+ decided to meet virtually for its Dec.4 meeting to set production quotas. The good news came for markets when China's government announced that it will boost Covid-19 vaccination while stepping back from its quarantine policies.

Elsewhere, and despite market rumours, OPEC has not indicated it plans further cuts in its meeting as European sanctions on Russian oil imports take effect on December 5. Nevertheless, negotiations on a price cap for Russian oil go on.

Analysts at ANZ Bank said that ''Germany warned it can’t rule out temporary supply bottlenecks when a ban on imports on Russian crude starts next month. OPEC also appears to be reducing output in line with its agreement to cut production.''

For the week ahead, the focus is on Federal Reserve Chairman Jerome Powell’s address on the economy and the US labour market in Friday's Nonfarm Payrolls event.

WTI technical analysis

As illustrated, the price is meeting the channel top, on the front side of the trendline resistance, breaking horizontal structure and posied for a downside continuation.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD keeps the rangebound trade near 1.1850

EUR/USD is still under pressure, drifting back towards the 1.1850 area as Monday’s session draws to a close. The modest decline in spot comes as the US Dollar picks up a bit of support, while thin liquidity and muted volatility, thanks to the US market holiday, are exaggerating price swings and keeping trading conditions choppy.

GBP/USD flirts with daily lows near 1.3630

GBP/USD has quickly given back Friday’s solid gains, turning lower at the start of the week and drifting back towards the 1.3630 area. The focus now shifts squarely to Tuesday’s UK labour market report, which is likely to keep the quid firmly in the spotlight and could set the tone for Cable’s next move.

Gold battle around $5,000 continues

Gold is giving back part of Friday’s sharp rebound, deflating below the key $5,000 mark per troy ounce as the new week gets underway. Modest gains in the US Dollar are keeping the metal in check, while thin trading conditions, due to the Presidents Day holiday in the US, are adding to the choppy and hesitant tone across markets.

AI Crypto Update: Bittensor eyes breakout as AI tokens falter

The artificial intelligence (AI) cryptocurrency segment is witnessing heightened volatility, with top tokens such as Near Protocol (NEAR) struggling to gain traction amid the persistent decline in January and February.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.