WTI has climbed above $85.00, the rally could be harmed due to multiple headwinds. (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• WTI has climbed above $85.00, the rally could be harmed due to multiple headwinds.
• US administration has announced an oil release of 10-15 million barrels from its SPR.
• The continuation of the no-tolerance approach towards Covid-19 by China has kept a lid on the oil demand.

The pair currently trades last at 85.06.

The previous day high was 86.18 while the previous day low was 83.71. The daily 38.2% Fib levels comes at 85.24, expected to provide resistance. Similarly, the daily 61.8% fib level is at 84.65, expected to provide support.

West Texas Intermediate (WTI), futures on NYMEX, have extended their Tokyo gains above $85.00 and are oscillating above the same comfortably. The oil prices are still inside the woods, auctioning in a charted territory of $83.56-86.15 from Monday’s trading session.

The reason behind a rebound in oil prices could be tagged to a decline in the US dollar index (DXY), however, the rebound move could get faded amid the presence of multiple headwinds.

Signs of recession in the US economy are bolstering as the Federal Reserve (Fed) is on its way to tighten policy further to achieve its agenda of bringing price stability. Earlier, rate hikes by the Fed have done little in softening the price pressures. Therefore, the confidence lies in further deterioration of growth prospects rather than a slowdown in the price rise index.

Apart from that, a shift of J.P. Morgan liquidity from delivery equity to underweight bonds has undermined the equity class, reported Reuters. A drop in preference for equity doesn’t resemble a condition of a blissful economy.

On the supply front, US President Joe Biden’s administration has announced an oil release from its emergency reserve to balance out the demand-supply mechanism. The US economy will release 10-15 million oil barrels from its Strategic Petroleum Reserve (SPR) this week.

Apart from that, the continuation of a no-tolerance approach towards Covid-19 by China has kept a lid on the oil demand.

Technical Levels: Supports and Resistances

XTIUSD currently trading at 85.06 at the time of writing. Pair opened at 84.71 and is trading with a change of 0.41 % .

The pair is trading above its 20 Daily moving average @ 84.15, below its 50 Daily moving average @ 86.96 , below its 100 Daily moving average @ 95.43 and below its 200 Daily moving average @ 97.23

The previous day high was 86.18 while the previous day low was 83.71. The daily 38.2% Fib levels comes at 85.24, expected to provide resistance. Similarly, the daily 61.8% fib level is at 84.65, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 83.56, 82.4, 81.09
• Pivot resistance is noted at 86.02, 87.33, 88.49

[/s2If]
Join Our Telegram Group