WTI Price Analysis: Responsive buy sends oil near four-day high around $77.00

West Texas Intermediate (WTI), futures on NYMEX, have scaled to near four-day high around $77.00 after a healthy responsive buying from near $74.00. The oil price has ignored the rising hawkish Federal Reserve (Fed) bets after a revival in the United States’ household spending. The catalyst that is infusing strength in the oil price is the supply cut by Russia after sanctions from western allies to trim its funding for arms and ammunition for the invasion of Ukraine.

Volatility in the US Dollar Index (DXY) has squeezed dramatically, however, the upside is still favored as Fed policymakers are reiterating a hawkish stance to tame the stubborn inflation.

On a four-hour scale, the oil price has formed a Head and Shoulder chart pattern that conveys a sheer consolidation and results in a downside break after surrendering the neckline. The neckline of the aforementioned chart pattern is plotted from January 5 low at $72.64.

The 50-period Exponential Moving Average (EMA) at $76.65 is barricading the oil price, at the time of writing.

Meanwhile, the Relative Strength Index (RSI) (14) has delivered a range shift move from the bearish range of 20.00-40.00 to the 40.00-60.00 range, indicating a bullish reversal. The RSI (14) has taken support at 40.00.

A responsive buying in the oil price favors an upside to near February 3 high around $78.18 and round-level resistance of $80.00 after surpassing a four-day high around $77.00 decisively.

In an alternate scenario, a confident break below the H&S neckline will drag the asset towards December 9 low at $70.27 followed by September 2021 low around $67.00.

WTI four-hour chart