- WTI bulls take on the confluence of the daily and weekly 50% and 38.2% Fibos.
- Risk-on sentiment kicks the energy complex into bullish gear.
The price of oil was higher on Monday, ending on Wall Street up near 5.6% in the case of West Texas Intermediate.
A weaker US dollar falling back bullish long term bullish territory and firmer US stocks helped to lift the commodity and energy complex.
WTI spot was at $65.40 by the close of play on Wall Street after climbing from a low of $61.76 and reaching a high of $65.97.
The dollar index DXY, which measures the currency against six peers, was down 0.5% to 93 the figure after hitting its highest level in more than nine months on Friday.
The drop in the value of the greenback was making crude less expensive for holders of other currencies.
Meanwhile, the MSCI world equity index which tracks shares in 50 countries, was up, after having its biggest weekly fall since June last week and the S&P 500 was printing a fresh record high.
Meanwhile, however, many nations are responding to the rising coronavirus infection rate by introducing new travel restrictions which is a headwind for energy prices.
China, the world's largest oil importer, has imposed new restrictions, which is affecting shipping and global supply chains.
However, ''China's 'Zero-Covid' strategy appears to have quickly contained the outbreak, suggesting that recent disruptions in the Middle Kingdom could prove short-lived,'' analysts at TD Securities argued.
''This suggests that the impact on Chinese energy demand may be underwhelming relative to recent fears, which argues that prices should return on a rising trajectory.''
WTI technical analysis
The price has rallied to break a 50% mean reversion of the mid-August rout which has equated to a near 38.2% of the weekly decline from the end of last month.
In doing so, the price is testing the daily resistance structure marled by old support near 66 the figure.
This is an area that would be expected to hold initial tests and potentially lead to subsequent declines in the broader bearish trend.
With that being said, there are prospects of a deeper correction of the weekly drop if the price beaks 66.50. The 67.50 before the weekly counter-trendline will be the biggest barrier to regain bullish territory in the 70s.
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
USD/JPY jumps above 156.00 on BoJ's steady policy
USD/JPY has come under intense buying pressure, surging past 156.00 after the Bank of Japan kept the key rate unchanged but tweaked its policy statement. The BoJ maintained its fiscal year 2024 and 2025 core inflation forecasts, disappointing the Japanese Yen buyers.
AUD/USD consolidates gains above 0.6500 after Australian PPI data
AUD/USD is consolidating gains above 0.6500 in Asian trading on Friday. The pair capitalizes on an annual increase in Australian PPI data. Meanwhile, a softer US Dollar and improving market mood also underpin the Aussie ahead of the US PCE inflation data.
Gold price flatlines as traders look to US PCE Price Index for some meaningful impetus
Gold price lacks any firm intraday direction and is influenced by a combination of diverging forces. The weaker US GDP print and a rise in US inflation benefit the metal amid subdued USD demand. Hawkish Fed expectations cap the upside as traders await the release of the US PCE Price Index.
Stripe looks to bring back crypto payments as stablecoin market cap hits all-time high
Stripe announced on Thursday that it would add support for USDC stablecoin, as the stablecoin market exploded in March, according to reports by Cryptocompare.
US economy: Slower growth with stronger inflation
The US Dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.