Oil prices are facing the wrath of soaring recession fears, Pivot Orderbook analysis

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE and login below to read further [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• Oil prices are facing the wrath of soaring recession fears.
• Weaker Caixin Manufacturing PMI has infused fresh blood in bears.
• Western central banks are gearing up for a fresh rate hike cycle.

The pair currently trades last at 88.69.

The previous day high was 92.53 while the previous day low was 88.1. The daily 38.2% Fib levels comes at 89.79, expected to provide resistance. Similarly, the daily 61.8% fib level is at 90.84, expected to provide resistance.

West Texas Intermediate (WTI), futures on NYMEX, is on the verge of delivering a downside break of the consolidation, which has formed in a narrow range of $88.54-89.32 in the Tokyo session. The asset has surrendered the psychological support of $90.00 as western central banks are gearing up for a fresh rate hike cycle to fix the inflation chaos.

Price pressures are soaring in the global markets. The European Central Bank (ECB)’s preferred inflation tool Harmonized Index of Consumer Prices (HICP) has crossed the whooping figure of 9% amid soaring energy bills.

The inflation rate in the US economy displayed exhaustion signals but still operates near 8.5%, which is extremely deviated from the desired rate of 2%. And, the UK economy is the major victim of inflationary pressures. As per a Citi survey, long term-inflation expectations have soared to 4.8%, much higher than the long-term target of the Bank of England (BOE) at 2%.

Meanwhile, the downbeat Caixin Manufacturing PMI data has also weakened the oil prices. The economic data has been trimmed to 49.5 against the consensus of 50.2 and the prior release of 50.4. It is worth noting that China is the largest importer of oil and a decline in oil consumption by the largest importer is sufficient to drag the black gold into a negative trajectory.

Also, the black gold has failed to capitalize on a decline in oil stockpiles reported by the Energy Information Administration (EIA) for the past week. The oil inventories have declined by 3.326 million barrels vs. a decline of 3.282 million barrels reported earlier.

In today’s session, the US ISM Manufacturing PMI carries significant importance. As per the consensus, the economic data is seen at 52.0 against the former figure of 52.8. An occurrence of the same will put more pressure on oil prices as recession fears will strengthen further.

Technical Levels: Supports and Resistances

XTIUSD currently trading at 88.69 at the time of writing. Pair opened at 88.63 and is trading with a change of 0.07 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 90.76, 50 SMA 95.86, 100 SMA @ 102.48 and 200 SMA @ 95.21.

The previous day high was 92.53 while the previous day low was 88.1. The daily 38.2% Fib levels comes at 89.79, expected to provide resistance. Similarly, the daily 61.8% fib level is at 90.84, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 86.97, 85.32, 82.54
• Pivot resistance is noted at 91.4, 94.18, 95.83

[/s2If]
Join Our Telegram Group