WTI has dropped perpendicularly to near $70.63 after headlines that US Blinken is visiting Saudi Arabia. (Pivot Orderbook analysis)
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- WTI has dropped perpendicularly to near $70.63 after headlines that US Blinken is visiting Saudi Arabia.
- Global central banks are gearing up for a fresh interest rate hike to strengthen their side in the battle against stubborn inflation.
- Hopes of a recession will skyrocket as lending activity by commercial banks would further reduce due to higher interest rates.
The pair currently trades last at 71.01.
The previous day high was 74.36 while the previous day low was 71.81. The daily 38.2% Fib levels comes at 73.39, expected to provide resistance. Similarly, the daily 61.8% fib level is at 72.78, expected to provide resistance.
West Texas Intermediate (WTI), futures on NYMEX, have witnessed an intense sell-off in the European session. The oil price has shown a vertical decline and has dropped to near $70.63. The black gold has surrendered the majority of gains added to optimism about production cuts by Saudi Arabia.
The US Dollar Index (DXY) has displayed a decent recovery move after finding strength near the crucial support at 103.80. A solid recovery in the USD Index has also weighed on the oil price.
Despite the announcement of production cuts by Saudi Arabia, oil prices are failing to come out of the bearish trajectory. It seems that gloomy demand is the major catalyst that is dragging the oil price lower. Global central banks are gearing up for a fresh interest rate hike to strengthen their side in the battle against stubborn inflation.
This month, the Federal Reserve (Fed), the European Central Bank (ECB), and the Bank of England (BoE) are expected to tighten their monetary policy further. The street is confident that central banks belonging to the shared continent will definitely step up their interest rates whole views about Fed’s interest rate decision are mixed.
After a fresh rate hike cycle, hopes of a recession in the global economy will skyrocket as lending activity by commercial banks would further reduce. Investors should note that Germany has already reported a recession after displaying a contraction in the Gross Domestic Product (GDP) consecutively.
The oil price has come under pressure as U.S. Secretary of State Antony Blinken is traveling to Saudi Arabia for June 6-8. The visit to the world’s largest oil exporter has been scheduled days after Riyadh pledged to further cut oil production, a move likely to add tension to a U.S.-Saudi relationship already strained by the kingdom’s human rights record and disputes over America’s Iran policy, as reported by Reuters.
Technical Levels: Supports and Resistances
XTIUSD currently trading at 71.01 at the time of writing. Pair opened at 71.98 and is trading with a change of -1.35 % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 71.01 |
| 1 | Today Daily Change | -0.97 |
| 2 | Today Daily Change % | -1.35 |
| 3 | Today daily open | 71.98 |
The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 71.76, 50 SMA 74.83, 100 SMA @ 75.63 and 200 SMA @ 78.97.
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 71.76 |
| 1 | Daily SMA50 | 74.83 |
| 2 | Daily SMA100 | 75.63 |
| 3 | Daily SMA200 | 78.97 |
The previous day high was 74.36 while the previous day low was 71.81. The daily 38.2% Fib levels comes at 73.39, expected to provide resistance. Similarly, the daily 61.8% fib level is at 72.78, expected to provide resistance.
Note the levels of interest below:
- Pivot support is noted at 71.07, 70.17, 68.52
- Pivot resistance is noted at 73.62, 75.27, 76.17
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 74.36 |
| Previous Daily Low | 71.81 |
| Previous Weekly High | 73.58 |
| Previous Weekly Low | 67.12 |
| Previous Monthly High | 76.61 |
| Previous Monthly Low | 64.31 |
| Daily Fibonacci 38.2% | 73.39 |
| Daily Fibonacci 61.8% | 72.78 |
| Daily Pivot Point S1 | 71.07 |
| Daily Pivot Point S2 | 70.17 |
| Daily Pivot Point S3 | 68.52 |
| Daily Pivot Point R1 | 73.62 |
| Daily Pivot Point R2 | 75.27 |
| Daily Pivot Point R3 | 76.17 |
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