WTI Price Analysis: Corrects to $80.00 after a gap-up move, volatility to remain high

The oil price has corrected marginally after a gap-up opening above $81.00.
OPEC+ will cut oil production further by around 1.16 million bpd.
The USD Index has been driven higher amid renewed fears of a rebound in inflation.

Sagar Dua FXStreet

West Texas Intermediate (WTI), futures on NYMEX, have shown some correction after failing to sustain above $81.00 in the Asian session. The oil price had a stellar gap-up opening above $81.00, 7% higher from Friday’s closing inspired by the announcement of further production cuts by OPEC+ this weekend.

According to Reuters, the oil cartel will cut the overall oil production by around 1.16 million barrels/day (bpd), which will lead to the overall pledge of production cut to 3.66 million bpd.

Meanwhile, the US Dollar index (DXY) has printed a fresh weekly high at 102.95 as higher oil prices are expected to fuel up global inflationary pressures. This might force the Federal Reserve (Fed) to continue its policy-tightening spell further.

On the daily scale, the oil price has sensed some long-liquidations after a solid gap-up move post facing barriers near the horizontal resistance plotted from March 07 high around $81.00. Upward-sloping 10-period Exponential Moving Average (EMA) at $74.20 indicates that the upside momentum is extremely solid.

The Relative Strength Index (RSI) (14) has climbed above 60.00 for the first time in the past three months, showing no signs of divergence and any evidence of an overbought situation.

Should the oil price break above April 03 high near $81.60, bulls will drive the asset towards December 01 high at $83.30 followed by October 21 high at $85.66.

On the flip side, a downside move below March 31 low at $73.31 would drag the asset toward March 23 high at $71.69. A break below the latter would further drag the oil price toward March 27 low at $69.18.

WTI daily chart

WTI US OIL

Overview
Today last price	80.21
Today Daily Change	4.45
Today Daily Change %	5.87
Today daily open	75.76

Trends
Daily SMA20	72.62
Daily SMA50	75.77
Daily SMA100	76.95
Daily SMA200	83.64

Levels
Previous Daily High	75.78
Previous Daily Low	73.83
Previous Weekly High	75.78
Previous Weekly Low	69.18
Previous Monthly High	80.99
Previous Monthly Low	64.39
Daily Fibonacci 38.2%	75.04
Daily Fibonacci 61.8%	74.58
Daily Pivot Point S1	74.47
Daily Pivot Point S2	73.18
Daily Pivot Point S3	72.52
Daily Pivot Point R1	76.41
Daily Pivot Point R2	77.07
Daily Pivot Point R3	78.36

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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