The oil price has corrected marginally after a gap-up opening above $81.00. (Pivot Orderbook analysis)

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• The oil price has corrected marginally after a gap-up opening above $81.00.
• OPEC+ will cut oil production further by around 1.16 million bpd.
• The USD Index has been driven higher amid renewed fears of a rebound in inflation.

The pair currently trades last at 80.21.

The previous day high was 75.78 while the previous day low was 73.83. The daily 38.2% Fib levels comes at 75.04, expected to provide support. Similarly, the daily 61.8% fib level is at 74.58, expected to provide support.

West Texas Intermediate (WTI), futures on NYMEX, have shown some correction after failing to sustain above $81.00 in the Asian session. The oil price had a stellar gap-up opening above $81.00, 7% higher from Friday’s closing inspired by the announcement of further production cuts by OPEC+ this weekend.

According to Reuters, the oil cartel will cut the overall oil production by around 1.16 million barrels/day (bpd), which will lead to the overall pledge of production cut to 3.66 million bpd.

Meanwhile, the US Dollar index (DXY) has printed a fresh weekly high at 102.95 as higher oil prices are expected to fuel up global inflationary pressures. This might force the Federal Reserve (Fed) to continue its policy-tightening spell further.

On the daily scale, the oil price has sensed some long-liquidations after a solid gap-up move post facing barriers near the horizontal resistance plotted from March 07 high around $81.00. Upward-sloping 10-period Exponential Moving Average (EMA) at $74.20 indicates that the upside momentum is extremely solid.

The Relative Strength Index (RSI) (14) has climbed above 60.00 for the first time in the past three months, showing no signs of divergence and any evidence of an overbought situation.

Should the oil price break above April 03 high near $81.60, bulls will drive the asset towards December 01 high at $83.30 followed by October 21 high at $85.66.

On the flip side, a downside move below March 31 low at $73.31 would drag the asset toward March 23 high at $71.69. A break below the latter would further drag the oil price toward March 27 low at $69.18.

Technical Levels: Supports and Resistances

XTIUSD currently trading at 80.21 at the time of writing. Pair opened at 75.76 and is trading with a change of 5.87 % .

The pair is trading above its 20 Daily moving average @ 72.62, above its 50 Daily moving average @ 75.77 , above its 100 Daily moving average @ 76.95 and below its 200 Daily moving average @ 83.64

The previous day high was 75.78 while the previous day low was 73.83. The daily 38.2% Fib levels comes at 75.04, expected to provide support. Similarly, the daily 61.8% fib level is at 74.58, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 74.47, 73.18, 72.52
• Pivot resistance is noted at 76.41, 77.07, 78.36

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