|

WTI rallies towards $76.50 as the USD remains offered due to Powell’s speech

  • Western Texas Intermediate got bolstered as the US Dollar weakens on soft US Fed Powell remarks
  • China’s reopening and Turkey’s earthquake are one of the multiple factors underpinning oil prices.
  • WTI Technical Analysis: Range-bound, but it could test $78.00 PB in the short term.

The US crude oil benchmark, also known as Western Texas Intermediate (WTI), advances sharply as the US Dollar (USD) weakens, as the US Federal Reserve (Fed) Chair Jerome Powell speaks at the Economic Club of Washington. At the time of writing, WTI is trading at $76.50 PB.

Wall Street turned green as Fed Chair Jerome Powell failed to pushback against the last week’s astonishing employment report in the United States (US), which spurred a market’s reaction, sending the US Dollar soaring and US Treasury bond yields jumping more than 20 bps, namely the 10-year benchmark note rate.

However, the US Dollar Index (DXY) is falling 0.35%, down at 103.264, sparking an upward reaction in WTI, hovering around the 20-day Exponential Moving Average (EMA) at $77.61.

Additional factors influencing oil prices are optimism about China’s reopening, and worries about supply shortages as a major export terminal in Turkey was shut down following an earthquake in the country.

China’s reopening following the relaxation of the Covid-19 zero-tolerance policy augmented speculations that oil demand would increase during 2023. Even the International Energy Agency (IEA) estimates that half of 2023 global oil demand will come from China.

Meanwhile, operations at Ceyhan, Turkey’s main oil export terminal, were shut after an earthquake hit the region. The terminal will remain closed until February 8.

WTI technical analysis

WTI is trading sideways after the US Federal Reserve Chair Jerome Powell finished its speech. It should be said that WTI broke to new daily highs of $77.11 on dovish remarks by Powell, weakening the US Dollar. Nevertheless, oil failed to gain traction and clear the 20-day EMA at $77.58, which could’ve exposed last Friday’s high at $77.96. Break above and the $78.00 figure is up for grabs.

On the flip side, WTI's first support would be $74.40, which, once cleared could pave the way for further downside.

WTI US OIL

Overview
Today last price76.73
Today Daily Change2.08
Today Daily Change %2.79
Today daily open74.65
 
Trends
Daily SMA2078.79
Daily SMA5077.61
Daily SMA10081.01
Daily SMA20090.63
 
Levels
Previous Daily High74.68
Previous Daily Low72.5
Previous Weekly High80.61
Previous Weekly Low73.36
Previous Monthly High82.68
Previous Monthly Low72.64
Daily Fibonacci 38.2%73.85
Daily Fibonacci 61.8%73.34
Daily Pivot Point S173.21
Daily Pivot Point S271.77
Daily Pivot Point S371.03
Daily Pivot Point R175.39
Daily Pivot Point R276.13
Daily Pivot Point R377.57

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

More from Christian Borjon Valencia
Share:

Editor's Picks

GBP/USD stays below 1.3400 after soft UK CPI data

GBP/USD struggles to gain traction and stays below 1.3400 in the second half of the day on Wednesday. The UK annual Consumer Price Index (CPI) inflation cooled to 2.6% in June against the market forecast of 2.7%, making it difficult for the British Pound gather recovery momentum. Meanwhile, investors keep a close eye on headlines coming out of the Middle East.

EUR/USD stabilizes near 1.1400 as markets focus on geopolitics

EUR/USD trades in a narrow channel at around 1.1400 on Wednesday. In the absence of high-impact data releases, escalating geopolitical tensions in the Middle East caps the pair's upside. On Thursday, the European Central Bank (ECB) will announce monetary policy decisions.

Gold extends rally as Middle East concerns intensify

Gold extends gains for the fourth consecutive day, standing comfortably above $4,100, unfazed by the risk-off market amid rising tensions in Iran and higher Oil prices. The pair has rallied nearly 2.5% so far this week and is on track for its best weekly performance in more than three months.

Australia unemployment rate set to steady at 4.4% in June, signaling strong job market

Australia will publish the June monthly employment report on Thursday at 01:30 GMT, and market participants expect a modest increase in job creation in the land Down Under. The Australian Bureau of Statistics is expected to announce that the country added 15K new jobs in the month, while the Unemployment Rate is forecast at 4.4%, unchanged from May.

US – Fed preview: A divided hold
The first month after Kevin Warsh's debut at the FOMC's June meeting has brought mixed signals on the inflation front. On one hand, the re-escalation of the war in Iran has lifted energy prices higher again. Yet on the other hand, Warsh's hawkish comments have already lifted real rates, supported broad USD and tightened financial conditions while realized inflation surprised to the downside in June.
US Dollar mid-year outlook: Exceptional currency, exceptional risks?
The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.