WTI consolidates the drop to $ 53.50 amid bearish API report

WTI slipped to $53.50 on overnight trades post-API data release.
Larger inventory build and stronger USD weighed on the prices.
Six week old ascending support line becomes immediate support at $53.50 contrast to $54.20 acting as nearby resistance.

Anil Panchal FXStreet

WTI declined to near $53.50 in the overnight trades after a private survey of US crude stocks showed a bigger-than-expected build. Also, weighing on the price is the USD strength that negatively affects commodities termed in the greenback. On the other hand, supply outages and short-term technical pattern play their role to limit the downside.

Global traders weigh less on OPEC+ output cuts and the US sanctions on Venezuela as rising inventory build continues to challenge the supply glut. The private survey of oil inventory data conducted by American Petroleum Institute (API) showed higher stockpiles at 2.514M against 2.098M rise marked last week.

In case of the demand side, expectations concerning global economic slowdown are taking the lead to cap the advances. Weak industrial activities, output growth and trade data spreading across the globe and signaling lesser energy demand in the future. The recent strength of the USD, mainly due to welcome data and pessimism surrounding the EU and the UK, also become negative for the crude prices.

Looking forward, energy traders will be on the lookout for official oil stockpile data released by the US department of energy’s Energy Information Administration (EIA). The inventory update is scheduled for release at 15:30 GMT. The weekly stockpile figure rose by 0.9M during the previous week and is expected to follow API pattern with 1.3M addition for the last week.

Technical Analysis

The WTI benchmark is presently testing six week old ascending supportline around $53.50. The energy quote has to provide a decisive closing under the same in order to mark fresh decline to 23.6% Fibonacci retracement level of its rise since early 2019, at $52.40. In case prices continue trading southwards past $52.40, the $51.00 and the $50.40 can offer intermediate halts before highlighting the $50.00 round-figure.

On the flipside, the $54.20 and the $55.00 are likely immediate resistances for the WTI. It should also be noted that an upside beyond $55.00 may find it hard to conquer $55.55 and the $55.80 resistances.

WTI 4-Hour chart

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

GBP/USD dips below 1.3350 with bullish momentum losing steam

The British Pound ticks lower against the US Dollar Monday, attempting to close a seven-day rally, as tensions rise again in the Strait of Hormuz, one of the critical points in the peace process between Washington and Tehran. The GBP/USD pair trades near 1.3340 at the time of writing, down from 1.3387 highs last week, although it maintains a near-term bullish trend intact.

EUR/USD clings to daily gains, still below 1.1450

EUR/USD manages to shrug off the initial bearish tone and advances toward the 1.1440-1.1450 band on Monday, up modestly for the day. Meanwhile, the pair’s mild gains comes on the back of the lack of clear direction in the Greenback in quite an apathetic start to the week.

Gold remains offered below $4,200

Gold comes under fresh downside pressure on Monday, reversing three daily upticks in a row and meeting some initial resistance around the $4,200 mark per troy ounce. Safe-haven demand has shifted toward the US Dollar as renewed tensions surrounding the Strait of Hormuz weigh on market sentiment, limiting the precious metal's upside.

XRP extends decline as risk-off sentiment, fading retail demand weigh

Ripple (XRP) sustains losses on Monday, edging lower toward the short-term $1.10 support. XRP failed to sustain momentum above $1.20 on the previous day, prompting profit-taking amid a broader crypto market drawdown attributed to mild inflows into related digital investment products, declining retail participation and macroeconomic uncertainty.

The US Dollar just beat the Swiss Franc at its own safe-haven game

As the king among safe havens, the Swiss Franc is supposed to benefit from geopolitical shocks such as the Iran war. This time, it didn’t. The Swissie is nearly 6% below January’s peak against the USD after a sharp decline that came along with the war in Iran and the closure of the Strait of Hormuz.

Kevin Warsh offers no policy clues: Why markets still got their answer

Financial markets came to Sintra looking for clues about the Federal Reserve's (Fed) next move. They largely left with confirmation that Fed Chair Kevin Warsh intends to make those clues much harder to find.