Oil prices have shifted into a negative trajectory amid accelerating US recession fears. (Pivot Orderbook analysis)

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• Oil prices have shifted into a negative trajectory amid accelerating US recession fears.
• A tight US inflation report would force the Fed to continue the current pace of hiking interest rates.
• US President Joe Biden believes that the recession situation will be slight if it occurs.

The pair currently trades last at 86.05.

The previous day high was 88.85 while the previous day low was 85.22. The daily 38.2% Fib levels comes at 86.61, expected to provide resistance. Similarly, the daily 61.8% fib level is at 87.46, expected to provide resistance.

West Texas Intermediate (WTI), futures on NYMEX, witnessed a steep fall to near $85.00 after surrendering the critical support of $87.00. The oil prices have attempted a rebound, however, the downside risks are still favored amid escalating fears of a recession situation in the US economy.

Tuesday’s warning from chairman and CEO of JPMorgan Chase, Jamie Dimon that the US economy could slip into recession in the coming six to nine months grabbed the spotlight. He further added that the Eurozone is already in recession and it may put the mighty US into recession too. He cited soaring inflation and interest rates, and the war situation as responsible for the recession situation ahead reported NewsBytes.

While US President Joe Biden has denied an extreme recession situation in the US. He believes that ”If recession will be there, it’ll be very slight. The comments from US President Joe Biden could be a sigh of relief for the market participants.

On the global front, International Monetary Fund (IMF) has cut global growth projections. The institution has trimmed its 2023 global Gross Domestic Product (GDP) forecast to 2.7%, 20 basis points (bps) lower than expectations made in July, keeping the 2022 projections unchanged at 3.2%. A decline in the global growth rate may keep the oil prices volatile ahead.

For further guidance, Tuesday’s inflation report will be the key catalyst. Price pressures in the US economy have not responded well to the policy tightening announcements by the Federal Reserve (Fed). And, a higher-than-projected report would bolster the case of the fourth consecutive 75 basis points (bps) rate hike by the Federal Reserve (Fed). More stretching in Fed’s policy rates would dwindle the oil demand.

Technical Levels: Supports and Resistances

XTIUSD currently trading at 86.05 at the time of writing. Pair opened at 86.01 and is trading with a change of 0.05 % .

The pair is trading above its 20 Daily moving average @ 84.01, below its 50 Daily moving average @ 87.14 , below its 100 Daily moving average @ 96.28 and below its 200 Daily moving average @ 97.12

The previous day high was 88.85 while the previous day low was 85.22. The daily 38.2% Fib levels comes at 86.61, expected to provide resistance. Similarly, the daily 61.8% fib level is at 87.46, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 84.54, 83.07, 80.92
• Pivot resistance is noted at 88.16, 90.32, 91.79

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