WTI rebounds with a 3% gain, but rate hike fears loom large on the oil market. (Pivot Orderbook analysis)
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- WTI rebounds with a 3% gain, but rate hike fears loom large on the oil market.
- US hiring surge supports Wall Street recovery, softens greenback’s impact on oil prices.
- China’s weakening manufacturing activity weighs on WTI despite OPEC+ output cuts.
The pair currently trades last at 71.1.
The previous day high was 69.77 while the previous day low was 64.31. The daily 38.2% Fib levels comes at 67.68, expected to provide support. Similarly, the daily 61.8% fib level is at 66.4, expected to provide support.
Western Texas Intermediate (WTI), the US crude oil benchmark, climbed more than 3% on Friday but remained set to finish with more than 7% losses on fears for further rate hikes and a global economic slowdown. Hence, WTI is trading at $70.96 PB after hitting a low of $68.54.
Wall Street is posting a recovery after the US Bureau of Labor Statistics (BLS) revealed that hiring in the US is picking up, adding 253K jobs in April, as shown by the Nonfarm Payrolls (NFP) report. Although it triggered a jump in US Treasury bond yields, the greenback is weakening, offering some cushion to WTI prices.
WTI’s plunged after a report from the National Bureau of Statistics (NBS) in China revealed that manufacturing activity in April continued to weaken, later confirmed by the Caixin PMI report. That comes even after the Organization of Petroleum Exporting Countries and its allies, the OPEC+, moved to reduce its crude oil output by more than 1 million barrels per day in an effort to underpin oil prices.
Although it spurred a jump of more than 6% at the beginning of April, WTI erased those gains and some more.
Sources cited by Reuters said, “Crude is trying to reverse the recent washout in prices triggered by higher interest rates and recession fears mostly in the banking sector.”
From a technical perspective, WTI is downward biased, but the May 4 price action formed a large hammer preceded by a downtrend, suggesting that WTI could rally soon. The Relative Strength Index (RSI) indicator is approaching the neutral level, aiming higher, suggesting that buyers are gathering strength.
If WTI achieves a daily close above the May 3 daily high of $71.74, that will form a morning star, a bullish three-candle pattern, which could pave the way for further gains. That said, WTI will face solid resistance at the confluence of several EMAs, with the 20-day EMA At 74.86, followed by the 50-day EMA at $75.94, before testing the 100-day EMA at $77.54.
Technical Levels: Supports and Resistances
XTIUSD currently trading at 71.1 at the time of writing. Pair opened at 68.59 and is trading with a change of 3.66 % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 71.10 |
| 1 | Today Daily Change | 2.51 |
| 2 | Today Daily Change % | 3.66 |
| 3 | Today daily open | 68.59 |
The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 77.55, 50 SMA 75.72, 100 SMA @ 76.85 and 200 SMA @ 81.12.
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 77.55 |
| 1 | Daily SMA50 | 75.72 |
| 2 | Daily SMA100 | 76.85 |
| 3 | Daily SMA200 | 81.12 |
The previous day high was 69.77 while the previous day low was 64.31. The daily 38.2% Fib levels comes at 67.68, expected to provide support. Similarly, the daily 61.8% fib level is at 66.4, expected to provide support.
Note the levels of interest below:
- Pivot support is noted at 65.34, 62.1, 59.89
- Pivot resistance is noted at 70.8, 73.01, 76.26
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 69.77 |
| Previous Daily Low | 64.31 |
| Previous Weekly High | 79.14 |
| Previous Weekly Low | 73.88 |
| Previous Monthly High | 83.40 |
| Previous Monthly Low | 73.88 |
| Daily Fibonacci 38.2% | 67.68 |
| Daily Fibonacci 61.8% | 66.40 |
| Daily Pivot Point S1 | 65.34 |
| Daily Pivot Point S2 | 62.10 |
| Daily Pivot Point S3 | 59.89 |
| Daily Pivot Point R1 | 70.80 |
| Daily Pivot Point R2 | 73.01 |
| Daily Pivot Point R3 | 76.26 |
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