WTI is falling close to 4% on Monday on recession fears. (Pivot Orderbook analysis)

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• WTI is falling close to 4% on Monday on recession fears.
• Fed policymakers emphasized the need for further rate increases as inflation remains stickier.
• The US Dollar Index extended its gains and recorded a fresh 20-year high at 114.53, a headwind for oil prices.

The pair currently trades last at 76.31.

The previous day high was 83.79 while the previous day low was 78.01. The daily 38.2% Fib levels comes at 80.22, expected to provide resistance. Similarly, the daily 61.8% fib level is at 81.59, expected to provide resistance.

On Monday, the US crude oil benchmark, also known as WTI (Western Texas Intermediate), drops for the second straight day after sliding from above the $80 per barrel figure to the mid $70-$80s range. At the time of writing, WTI is exchanging hands at $76.31 per barrel, down by 3.63%.

Worries about a global economic slowdown are mounting, as energy prices have shown. Last week’s 75 bps rate hike by the Fed, alongside another 425 bps of worldwide central banks, fueled worries of a recession. Therefore, WTI remains defensive, as lower demand implies lower prices.

Sources cited by Reuters said, “With more and more central banks being forced to take extraordinary measures no matter the cost to the economy, demand is going to take a hit which could help rebalance the oil market.”

Another factor weighing US crude oil prices is the rapid rise of the greenback. The US Dollar Index, a gauge of the buck’s value vs. a basket of six currencies, edges up 0.98% at 114.128, a headwind for oil and US dollar-denominated commodities.

Elsewhere, Fed officials crossed newswires on Monday. The Boston Fed President Susan Collins expressed that further tightening is needed to temper inflation and emphasized that the unemployment rate should rise to achieve the Fed goal. Echoing her comments was Cleveland’s Fed President Loretta Mester, alongside Atlanta’s Fed President Raphael Bostic.

Oil traders’ attention turns to further US economic to be released ahead of the Organization of the Petroleum Exporting Countries (OPEC) and allies reunion, to be hosted on October 5. The US calendar will feature durable good orders, consumer confidence, and further Fed speaking, led by Fed Chair Jerome Powell, on Tuesday.

Technical Levels: Supports and Resistances

XTIUSD currently trading at 76.31 at the time of writing. Pair opened at 79.2 and is trading with a change of -3.85 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 86.16, 50 SMA 90.18, 100 SMA @ 99.27 and 200 SMA @ 96.45.

The previous day high was 83.79 while the previous day low was 78.01. The daily 38.2% Fib levels comes at 80.22, expected to provide resistance. Similarly, the daily 61.8% fib level is at 81.59, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 76.88, 74.55, 71.1
• Pivot resistance is noted at 82.66, 86.12, 88.44

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