- WTI gains some positive traction on Tuesday and recovers a part of the precious day’s slide.
- The technical setup favours bearish traders and supports prospects for a further downfall.
- Any positive move back above the $83.00 mark is likely to get sold into and remain capped.
West Texas Intermediate (WTI) Crude Oil prices attract some buying on Tuesday and move away from a near three-week low, around the $81.55 region touched the previous day. The commodity sticks to its modest intraday gains through the first half of the European session and currently trades around mid-$82.00s, up 0.25% for the day.
Worries that a further escalation in the Israel-Hamas conflict could disrupt oil supplies from the Middle East turn out to be a key factor lending some support to the black liquid. The upside, however, remains capped in the wake of the worsening economic conditions in China – the world's top oil importer – and headwinds stemming from rapidly rising borrowing costs, which could dent fuel demand.
From a technical perspective, the overnight sharp decline and a close below the $83.50-$83.30 horizontal support could be seen as a fresh trigger for bearish traders. Moreover, oscillators on the daily chart have just started drifting into the negative territory and suggest that the path of least resistance for Oil prices is to the downside. Hence, any subsequent move up is more likely to get sold into.
The $83.00 round figure, followed by the $83.30-$83.50 support breakpoint now seems to act as an immediate strong barrier. A sustained strength beyond, however, could lift Oil prices beyond the $84.00 mark, towards the $84.70 intermediate hurdle en route to the $85.00 psychological mark. The next relevant resistance is pegged near the mid-$85.00s, which if cleared will negate the bearish outlook.
On the flip side, the $82.00 round figure is likely to protect the immediate downside ahead of the overnight swing low, around the $81.55 region. Some follow-through selling will be seen as a fresh trigger for bearish traders and make Oil prices vulnerable to weaken further below the $81.00 mark. The downward trajectory could eventually drag the commodity towards the monthly low, around the $80.65 region.
WTI daily chart
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
-637336005550289133_XtraSmall.jpg)
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.