WTI Price Analysis: Big move looks overdue

WTI's daily chart shows a Bollinger band squeeze.
Low-volatility consolidation often ends with a violent move.

Omkar Godbole FXStreet Contributor

West Texas Intermediate (WTI), the North American oil benchmark, could soon witness a big move in either direction.

That’s because, the spread between Bollinger bands – volatility indicators placed 2 standard deviations above and below the 20-day simple moving average of price - has narrowed sharply due to the 1.5-month-long sideways churn in the range of $37 to $43.

Meanwhile, the Bollinger bandwidth, also a volatility indicator calculated by dividing the spread between the volatility bands by the 20-day SMA, has declined to 0.05 the lowest level since September 2018.

A prolonged period of low volatility consolidation or bull-ber tug of war often paves the way for a strong directional move.

Focus, therefore, is on the Bollinger bands, currently located at $40.22 and $42.37, respectively.

A strong move above the upper band would imply a bullish breakout and expose resistance at $49.41 (Feb. 5 low). On the other hand, a break below the lower band would signal an end of the bounce from lows below $10 observed in April and shift risk in favor of a drop to support at $34.38 (June 15 low).

Daily chart

Trend: Neutral

Technical levels

WTI

Overview
Today last price	42.01
Today Daily Change	0.17
Today Daily Change %	0.41
Today daily open	41.84

Trends
Daily SMA20	41.39
Daily SMA50	40.03
Daily SMA100	33.16
Daily SMA200	43.17

Levels
Previous Daily High	43.1
Previous Daily Low	41.7
Previous Weekly High	43.62
Previous Weekly Low	39.75
Previous Monthly High	42.52
Previous Monthly Low	38.73
Daily Fibonacci 38.2%	42.24
Daily Fibonacci 61.8%	42.57
Daily Pivot Point S1	41.32
Daily Pivot Point S2	40.81
Daily Pivot Point S3	39.92
Daily Pivot Point R1	42.73
Daily Pivot Point R2	43.62
Daily Pivot Point R3	44.13

Author

Omkar Godbole

FXStreet Contributor

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

AUD/USD edges higher as hot CPI inflation and hawkish RBA lift rate hike bets

The AUD/USD pair gathers strength to near 0.7035 during the Asian trading hours on Friday. The Australian Dollar edges higher against the US Dollar as hotter Australian CPI inflation data has bolstered expectations of Reserve Bank of Australia rate hikes.

USD/JPY meets support near 157.00

USD/JPY retreats for the third consecutive day on Friday, revisiting the 157.00 region before attempting some recovery as investors continue to assess the latest BoJ meeting, where the central bank left rates unchanged, as widely anticipated.

Gold sinks to fresh yearly lows despite risk-off mood as Fed rate hike bets weigh

Gold slips to fresh year-to-date lows on Friday. The metal struggles despite a risk-off mood across markets, as expectations of further Federal Reserve (Fed) interest rate hikes continue to dominate price action, leaving Gold on track to end the month in negative territory.

Ripple Price Forecast: XRP bulls defend $1.20 as sell-side pressure triggers liquidations

Ripple (XRP) trades around $1.25 on Friday, rising from a short-term support level established at $1.20. This minor upward correction follows a sharp sell-off, triggered amid reports of a hack attack on the Binance exchange that impacted approximately $6.3 billion. The attack drove the broader crypto market on edge, as Binance suspended both deposits and withdrawals to contain the situation.

BoJ recap: A pause for now... but Japan has entered a new inflation phase

The Bank of Japan left its short-term policy rate unchanged at 1.25% but delivered a distinctly hawkish message on the risk of an inflation overshoot. The decision passed by 8-1, with board member Takata dissenting in favour of an increase to 1.5%, while Governor Kazuo Ueda stressed that the Bank would continue adjusting policy as needed.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.