Oil prices have turned sideways after failing to extend recovery to near $80.00. (Pivot Orderbook analysis)

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• Oil prices have turned sideways after failing to extend recovery to near $80.00.
• The black gold price has not run out of steam as the US administration is ceasing oil supply to China.
• Falling US inflation has triggered odds of a slowdown in the pace of the Fed’s policy tightening.

The pair currently trades last at 78.44.

The previous day high was 79.35 while the previous day low was 77.32. The daily 38.2% Fib levels comes at 78.57, expected to provide resistance. Similarly, the daily 61.8% fib level is at 78.09, expected to provide support.

West Texas Intermediate (WTI), futures on NYMEX, have sensed a lack of strength in its upside journey toward the critical resistance of $80.00. The oil price has faced barricades in stretching its rally further around $79.40 amid profit-booking, however, the upside bias is still solid.

The oil price has been in a bullish trajectory from the past week as the Chinese economy has picked the path of recovery after remaining locked for a lengthy period to augment lockdown curbs to cease the further spread of the Covid-19 epidemic. The reopening measures by the Chinese economy after dismantling restrictions on the movement of men, materials, and machines and allowance of international travelers is going to spurt the economic growth ahead.

Meanwhile, a fresh decline in the United States inflation figures led by a recent fall in gasoline and used car prices has accelerated the odds of further recovery in oil demand ahead. According to Bill Diviney, Sr. Economist at ABN – AMRO, data released on Thursday in the US confirmed a slowdown in inflation, with the annual CPI rate falling to 6.5%, the lowest level since October 2021. And, falling inflation paves way for a 25 basis points (bps) Federal Reserve (Fed) interest rate hike, instead of a 50 bps hike.

The oil price is likely to get strengthened further as the US administration is ceasing oil supply to China from its Strategic Petroleum Reserve (SPR). In this scenario, the Chinese administration will be forced to look for alternative suppliers to augment their oil demand, which could trigger short-term pain for the oil supply but will strengthen oil prices further.

Technical Levels: Supports and Resistances

XTIUSD currently trading at 78.44 at the time of writing. Pair opened at 78.48 and is trading with a change of -0.05 % .

The pair is trading above its 20 Daily moving average @ 77.26, below its 50 Daily moving average @ 79.08 , below its 100 Daily moving average @ 82.44 and below its 200 Daily moving average @ 92.55

The previous day high was 79.35 while the previous day low was 77.32. The daily 38.2% Fib levels comes at 78.57, expected to provide resistance. Similarly, the daily 61.8% fib level is at 78.09, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 77.42, 76.35, 75.39
• Pivot resistance is noted at 79.45, 80.41, 81.48

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