WTI fades bounce off two-week low amid mixed concerns

WTI struggles to hold the previous day’s rebound amid quiet markets.
Cautious sentiment ahead of US Core PCE inflation data, absence of US stimulus deal test recovery moves.
Softer USD, hopes of firmer energy demand favor bulls.

Anil Panchal FXStreet

WTI drops back towards the $82.00 threshold, down 0.40% intraday around $82.15 amid an inactive start to Friday’s trading. The black gold marked a notable reversal from a fortnight low the previous day.

The oil benchmark dropped to the lowest since October 14 the previous day amid the initial US dollar pick-up and risk-off mood during early Thursday. However, the US dollar’s slump following the US Q3 GDP and European Central Bank (ECB) Interest Rate Decision recall the oil buyers.

That said, the US Dollar Index (DXY) dropped the most since October 13 after the US Q3 GDP US Q3 GDP slipped below 2.7% forecast to 2.0%, much lower than 6.7% prior. Also favoring USD bears was the European Central Bank’s (ECB) hint to start tapering the monthly bond purchases while saying the PEPP (that’s the pandemic emergency purchase program) will end next March. The regional central bank left monetary policy unchanged, as expected, with refinancing rate at 0.0% and deposit rates at -0.5%.

Elsewhere, Russia signals to help Europe tackle the gas crisis jostles with the geopolitical tensions in the Middle East to confuse the energy traders. Additionally, the supply outage fears and producers’ readiness to ease production controls, with lesser pace, also flash mixed messages and challenge the quote.

It should be noted that the absence of a deal on the US President Joe Biden’s $1.75 trillion infrastructures spending plan seems to have recently weighed on the S&P 500 Futures even as the Wall Street benchmark closed positive. The same should have exerted the latest pressured on the WTI prices.

Moving on, US Core PCE Inflation data for October, Fed’s favorite price pressure indicator will be important to watch for fresh impulse amid chatters over monetary policy tightening. The Core Personal Consumption Expenditures (PCE) - Price Index for September is likely to ease to 0.2% from 0.3% prior on the MoM basis. Additionally, the weekly prints of the Baker Hughes US Oil Rig Count, previous +443, will also be important to watch for oil traders.

Technical analysis

Only if the quote manages to provide a daily closing below the two-month-old support line near $81.40, the WTI sellers may take risk of entry, until then the black gold is ready to refresh multi-month high above $85.00.

Additional important levels

Overview
Today last price	82.36
Today Daily Change	0.73
Today Daily Change %	0.89%
Today daily open	81.63

Trends
Daily SMA20	80.32
Daily SMA50	73.96
Daily SMA100	72.52
Daily SMA200	67.17

Levels
Previous Daily High	84.05
Previous Daily Low	81.59
Previous Weekly High	83.92
Previous Weekly Low	80.61
Previous Monthly High	76.51
Previous Monthly Low	67.02
Daily Fibonacci 38.2%	82.53
Daily Fibonacci 61.8%	83.11
Daily Pivot Point S1	80.8
Daily Pivot Point S2	79.96
Daily Pivot Point S3	78.33
Daily Pivot Point R1	83.26
Daily Pivot Point R2	84.89
Daily Pivot Point R3	85.73

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.

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