WTI: Good news from Trump's doctors help bulls avoid head-and-shoulders breakdown

Trump's health progress pushes greenback lower and powers gains in WTI.
Oil's rise has saved the day for the bulls, according to technical charts.

Omkar Godbole FXStreet Contributor

West Texas Intermediate (WTI), the North American oil benchmark, is flashing green at press time, as the US dollar is facing selling pressure. The haven demand for the greenback looks to have weakened in response to President Trump's doctors' comments that he could be discharged from coronavirus hospital as soon as Monday.

A barrel of WTI is currently trading at $37.84, representing a 1.9% gain on the day. Meanwhile, the dollar index, which gauges the greenback's value against majors, is down over 0.10% at 93.70.

Trump's health update has eased political uncertainty and is pushing the higher. The S&P 500 futures are now up more than 0.6% on the day.

As such, the anti-risk greenback is losing ground, and making dollar-denominated commodities like oil look attractive. Stocks came under pressure in the second half of last week after Trump said he and the first lady have tested positive for coronavirus. The dollar rallied on Friday, snapping a four-day losing trend and pushing oil down by 4.3%.

However, market optimism about Trump's health could be premature. That's because Trump's fluctuating oxygen levels and a steroid drug treatment suggest that the President is suffering a more severe case of Covid-19.

For now, the risk reset has saved the day for oil bulls. The daily chart shows the black gold has bounced from the head-and-shoulders neckline support at $36.70.

A close below that level would confirm a bullish-to-bearish trend change and create room for a sell-off to $29.88 (target as per the measured move method).

Daily chart

Technical levels

WTI

Overview
Today last price	37.84
Today Daily Change	0.90
Today Daily Change %	1.90
Today daily open	37.13

Trends
Daily SMA20	39.19
Daily SMA50	40.97
Daily SMA100	39.6
Daily SMA200	39.9

Levels
Previous Daily High	38.81
Previous Daily Low	36.8
Previous Weekly High	40.88
Previous Weekly Low	36.8
Previous Monthly High	43.56
Previous Monthly Low	36.43
Daily Fibonacci 38.2%	37.56
Daily Fibonacci 61.8%	38.04
Daily Pivot Point S1	36.35
Daily Pivot Point S2	35.56
Daily Pivot Point S3	34.33
Daily Pivot Point R1	38.36
Daily Pivot Point R2	39.59
Daily Pivot Point R3	40.37

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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