WTI bears looking for a test of the 4-hour support

WTI bulls in charge, but the 4-hour time frame is compelling.
Fundamentals in favour of the bid, technically price needs to break resistance.

Ross J Burland FXStreet

WTI gained overnight as easing restrictions in the US and Europe raise hope of stronger demand. WTI was entering the early Asian session some 1.61% higher having travelled from a low of $62.94 to a high of $64.65.

Asia moves along, in holiday thin markets, the bulls are staying in control having climbed from a low of $64.45 to a high of $64.70 so far.

Oil stays bid o the optimism which has been brewing for a strong rebound in fuel demand in developed countries.

China is also expected to show a far better second half of the year which has overshadowed growing concerns of a full lockdown in India to curb the COVID-19 pandemic.

Meanwhile, the European Union is planning to ease restrictions on vaccinated travellers over the summer.

''This should boost holiday travel to coastal regions, as well as increase mobility in major cities,'' analysts at ANZ Bank explained.

''This comes as several countries emerge from lockdowns amid a fall in new infections of the coronavirus. In the US, New York and nearby regions are planning to lift capacity restrictions later this month. This is helping to offset the weakness in India, where a deadly second wave of COVID-19 is resulting in new restrictions being placed on the public.''

Meanwhile, money managers also modestly increased their net long WTI crude exposure according to the latest positioning data as short-covering activity outpaced long dispositions by a factor of two-to-one.

In other related news, Iraq’s oil minister, Ihsan Abdul Jabbar, said crude oil would probably remain around USD65/bbl in the coming months, according to analysts at ANZ Bank.

They say that ''he expects OPEC has no concern about lower prices, but will continue to keep them within normal averages.''

WTI technical analysis

WTI has been putting pressure on the bullish commitments from daily support and has run up towards the prior highs having corrected in the W-formation on the daily chart.

Meanwhile, an extension and break of recent highs put the 66 handle into focus.

That being said, the 4-hour chart could be due for a correction to check its own W-formation. 63.97 marks the old highs of the neckline of the formation as an initial downside target.

4-hour chart

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.

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