We continue to see a fight in WTI crude Oil as the demand remains subdued with the global economy heading for a recession, while the establishment wants it expensive. The volatility has been high and we have seen some large moves on both sides. Last week we saw US WTI crude move nearly $10 higher as the USD weakened, this week we’re seeing a total reversal as the sentiment turns negative again.
Comments about a reopening in China should be positive, but so far traders are uncertain whether and when that will happen which is not helping Oil much, since China is the largest importer of crude Oil. On the other hand, the FED is certainly slowing down with rate hikes, as are most other central banks after a crazy year and as a result, crude Oil has been weighing down.
US Crude Oil Live Chart – Printing A New Low for 2022
The 50 SMA rejected the price again
The bullish move last week stopped at the 50 SMA (yellow) on the daily chart, which has been acting as resistance. After two doji candlesticks below that moving average, the price reversed and Oil has turned bearish this week, with the USD making some decent gains after the positive US ISM services report on Monday.
So, positive data is still bad news for risk sentiment, since it increased the odds of the FED pushing a bit further with rate hikes. US WTI crude fell to $74.40s yesterday, which is the lowest level since December 27 last year, so sellers continue to be in control here.