Crude Oil Forecast: WTI Stable at $72.90 Amid Ceasefire News
The Western Texas Intermediate (WTI) crude oil price maintained its upward trend and remained well bid around $72.90 on Tuesday. Its upward trend can be attributed to the modest decline of the US dollar.
Moreover, the ongoing tensions in the Middle East and Russia’s invasion of Ukraine were other key factors potentially boosting crude oil prices due to supply concerns.
In contrast, the news of a ceasefire offer in the Middle East could potentially affect crude oil prices as market participants await developments regarding diplomatic efforts to ease tensions in the region.
Impact of Strong US Economic Data on Crude Oil Prices
It’s worth noting that previously released robust US economic data, like the PMI and nonfarm payrolls, will convince the Federal Reserve to keep interest rates higher for longer. This could strengthen the US dollar and put pressure on oil prices.
Fed Chair Jerome Powell has been clear about not rushing into rate cuts. US services sector growth improved, but suppliers struggled, raising input costs. Powell’s comments led to a jump in Treasury yields and the US dollar.
Therefore, the news could lower crude oil prices due to a stronger dollar and reduced expectations of economic stimulus.
Geopolitical Tensions Impacting Crude Oil Prices
Furthermore, the recent US airstrikes on Iranian targets in Iraq and Syria, in response to the deaths of American troops, were seen as one of the key factors that could limit the bearish pressure on crude oil prices.
The situation in the Middle East, including diplomatic meetings and ceasefire efforts, adds uncertainty. Additionally, Ukrainian drone attacks on Russia’s largest oil refinery have disrupted exports, impacting global supply.
Hence, the geopolitical tensions in the Middle East and Ukraine’s attacks on Russian refineries could bolster crude oil prices.
WTI Crude Oil Price Forecast: Technical Outlook
WTI Crude Oil’s current price is $72.90, displaying a consolidation phase within the 4-hour chart timeframe.
The green line serves as the pivot point, which is a crucial level for traders to watch. Resistance levels are layered at $73.49, $74.40, and $75.45, while support is firming up at $71.14, $70.09, and further down at $69.25.
The Relative Strength Index (RSI) indicates a reading of 34, hovering near oversold territory, which may signal an impending bullish correction if sustained. The 50-day Exponential Moving Average (EMA) at $75.66 is now a potential resistance area.
Chart analysis identifies an upward trendline, providing support near the $71.50 level. Doji and neutral candlestick formations around this support suggest indecision, yet this could also translate into a potential upward move if buying interest increases.
In conclusion, the current trend for WTI crude oil is poised for potential upside, with a recommendation to consider buying opportunities above the $72 mark, closely monitoring the pivot point and immediate support levels for further direction.
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