WTI bounces back amid US hiring boom, but rate hikes and slowdown worries persist

WTI rebounds with a 3% gain, but rate hike fears loom large on the oil market.
US hiring surge supports Wall Street recovery, softens greenback’s impact on oil prices.
China’s weakening manufacturing activity weighs on WTI despite OPEC+ output cuts.

Christian Borjon Valencia FXStreet

Western Texas Intermediate (WTI), the US crude oil benchmark, climbed more than 3% on Friday but remained set to finish with more than 7% losses on fears for further rate hikes and a global economic slowdown. Hence, WTI is trading at $70.96 PB after hitting a low of $68.54.

WTI fights for traction amid economic uncertainties

Wall Street is posting a recovery after the US Bureau of Labor Statistics (BLS) revealed that hiring in the US is picking up, adding 253K jobs in April, as shown by the Nonfarm Payrolls (NFP) report. Although it triggered a jump in US Treasury bond yields, the greenback is weakening, offering some cushion to WTI prices.

WTI’s plunged after a report from the National Bureau of Statistics (NBS) in China revealed that manufacturing activity in April continued to weaken, later confirmed by the Caixin PMI report. That comes even after the Organization of Petroleum Exporting Countries and its allies, the OPEC+, moved to reduce its crude oil output by more than 1 million barrels per day in an effort to underpin oil prices.

Although it spurred a jump of more than 6% at the beginning of April, WTI erased those gains and some more.

Sources cited by Reuters said, “Crude is trying to reverse the recent washout in prices triggered by higher interest rates and recession fears mostly in the banking sector.”

WTI Technical Analysis

From a technical perspective, WTI is downward biased, but the May 4 price action formed a large hammer preceded by a downtrend, suggesting that WTI could rally soon. The Relative Strength Index (RSI) indicator is approaching the neutral level, aiming higher, suggesting that buyers are gathering strength.

If WTI achieves a daily close above the May 3 daily high of $71.74, that will form a morning star, a bullish three-candle pattern, which could pave the way for further gains. That said, WTI will face solid resistance at the confluence of several EMAs, with the 20-day EMA At 74.86, followed by the 50-day EMA at $75.94, before testing the 100-day EMA at $77.54.

WTI US OIL

Overview
Today last price	71.1
Today Daily Change	2.51
Today Daily Change %	3.66
Today daily open	68.59

Trends
Daily SMA20	77.55
Daily SMA50	75.72
Daily SMA100	76.85
Daily SMA200	81.12

Levels
Previous Daily High	69.77
Previous Daily Low	64.31
Previous Weekly High	79.14
Previous Weekly Low	73.88
Previous Monthly High	83.4
Previous Monthly Low	73.88
Daily Fibonacci 38.2%	67.68
Daily Fibonacci 61.8%	66.4
Daily Pivot Point S1	65.34
Daily Pivot Point S2	62.1
Daily Pivot Point S3	59.89
Daily Pivot Point R1	70.8
Daily Pivot Point R2	73.01
Daily Pivot Point R3	76.26

Author

Christian Borjon Valencia

FXStreet

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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