WTI Crude Oil Choppy Session Continues to Play – Eyes on a Breakout! - Forex News by FX Leaders

WTI Crude Oil Choppy Session Continues to Play – Eyes on a Breakout!

Posted Monday, May 17, 2021 by
Arslan Butt • 2 min read

WTI Crude oil closed at $65.37 after placing a high of $65.62 and a low of $63.33. Crude oil re-bounced and recovered most of its previous day’s losses on Friday and ended the week on a positive note as the U.S. economic recovery outlook remained uneven amid volatile economic data that dimmed the concerns of early tapering the U.S. Federal Reserve. During this week, the crude prices hit the mid-week highest level as a substantial rise in the U.S. Consumer Price Index raised the concerns that the Federal Reserve would start reigning in its ultra-easy monetary policies earlier than expected.

However, on Friday, the economic data, including U.S. Retail Sales, remained flat in April and reduced fears of the country’s economy running too hot. On the data front, at 17:30 GMT, Retail Sales for April fell to 0.0% against the projected 1.0% and weighed on the U.S. dollar that helped crude oil to post gains. The Import Prices remained flat with the estimation of 0.7%. At 17:32 GMT, the Core Retail Sales also declined to -0.8% against the projected 0.5% and weighed on the U.S. dollar that further supported crude oil prices. At 18:15 GMT, the Industrial Production for April reduced to 0.7% against the anticipated 0.9% and weighed on the U.S. dollar that added gains in crude oil.

The Capacity Utilization Rate remained flat at a projected 75.0%. At 19:00 GMT, the Prelim UoM Consumer Sentiment for May dropped to 82.8 against the anticipated 90.2 and weighed on the U.S. dollar that pushed crude oil further on the upside. Business Inventories remained flat at 0.3%. The Prelim UoM Inflation Expectations also remained flat at 4.6%. The poor-than-expected U.S. macroeconomic data on Friday added pressure on the U.S. Dollar Index and dragged it to a 90.27 level. The U.S. Treasury yields for 10-year note also reduced to 1.625% and added further pressure on the greenback that ultimately supported crude oil prices. Another reason behind the rising oil prices was the report suggesting a restart of the entire pipeline system of the Colonial Pipeline. Colonial Pipeline reported on Thursday that it had begun deliveries in all of its markets. The resumed pipeline activity in the U.S. added strength to the crude oil prices and pushed them to above the $65 level. Traders were also watching the situation in the Middle East after Israel unleashed airstrikes on Friday against Palestinian militants in the Gaza strip in response to rocket fire deep into Israel’s commercial center.


Crude Oil Daily Technical Levels

Support Resistance
62.67 65.39
61.52 66.96
59.95 68.11
Pivot Point: 64.24

On the technical front, WTI crude oil is trading sideways at 65.43, maintaining a narrow trading range of 65.78 – 65. In case of a bearish breakout, WTI prices can drop until the support area of 64.32 whereas, the bullish breakout of 65.78 level can lead U.S. Oil price towards 66.68 level. The MACD is crossing below 0 levels, and it may trigger a selling trend in crude oil; thus, let’s keep an eye on 65 levels today as, below this, we may have an excellent sell signal. Good luck!

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