WTI tumbles below the 200-DMA on recession worries, Iran’s nuclear deal progress

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WTI tumbles below the 200-DMA on recession worries, Iran’s nuclear deal progress

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• WTI prices fall due to weak China-US economic data.
• China’s Industrial Production and Retail Sales increased less than expected.
• The PBoC reacted and cut interest rates as the bank aims to help reach the 2022 5% GDP target.
• Iran’s nuclear deal could be resolved soon, so oil prices slid.

The pair currently trades last at 88.18.

The previous day high was 94.14 while the previous day low was 90.64. The daily 38.2% Fib levels comes at 91.97, expected to provide resistance. Similarly, the daily 61.8% fib level is at 92.8, expected to provide resistance.

US crude oil benchmark, also known as WTI (West Texas Intermediate) drops for the second consecutive day on disappointing US and China data, reigniting recession fears worldwide, with traders moving toward safe-haven assets. On Monday, WTI shed 4.37% from its price, closing below its opening price at $87.85. However, as the Asian Pacific session begins, WTI is trading at $88.18 PB, edging up by 0.57%.

In the early Monday session, China’s economic docket reported Industrial Production and Retail Sales, each at 3.8% YoY and 2.7% YoY, respectively, missing forecasts. That said, the People’s Bank of China (PBoC) surprised the markets, slashing its 1-year MLF to 2.75%, a consequence of the previously mentioned.

During the New York session, the NY Fed Empire State Manufacturing Index for August tumbled to -31.3, lower than estimates, as shipments and new orders plunged.

Meanwhile, the latest developments in the Iran nuclear deal weighed on lower crude oil prices. Sources cited by the semi-official Iranian Students’ New Agency said that Tehran’s stance had been sent to the EU top commissioner Josep Borrell.

Iran Foreign Minister Hossein Amirabdollahian commented that an agreement with Washington could be reached to restore the accord “if the US shows a realistic approach and flexibility,” as reported by Bloomberg. Amirabdollahian said that they’re ready to enter the phase of announcing the deal “if our latest points are met” and said that if the US is trying to “gain concession, then we’ll have to talk and negotiate more.”

If Iran’s nuclear deal is approved, oil from Iran would be seen as a relief from high energy prices, particularly consumers, which had been dealing with skyrocketing petrol and gasoline prices, with countries like the US battling inflation at 4-decade highs.

Technical Levels: Supports and Resistances

XTIUSD currently trading at 88.18 at the time of writing. Pair opened at 91.36 and is trading with a change of -3.87 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 94.01, 50 SMA 101.96, 100 SMA @ 103.78 and 200 SMA @ 94.45.

The previous day high was 94.14 while the previous day low was 90.64. The daily 38.2% Fib levels comes at 91.97, expected to provide resistance. Similarly, the daily 61.8% fib level is at 92.8, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 89.95, 88.54, 86.45
• Pivot resistance is noted at 93.45, 95.55, 96.96

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