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WTI Faces Downward Pressure as Transit Normalizes
West Texas Intermediate (WTI) is trending downward as the market sheds the geopolitical risk premium that drove prices higher during the second quarter.
The main reason for oil price decline due to the Strait of Hormuz is gradually resuming for entry passage. As shipping flows return to normal, the supply fears that drove prices up earlier this year is fading.
TECHNICALS
1H Chart
Source: ACY
Daily Chart
Source: ACY
Pivotal 69.913 based from 2H chart
Support 65.99 next target price region if the 69.213 price breached
Resistance 2 73.614 based from 2H chart
Resistance 1 72.070 based from 1H chart
Bollinger Bands with prices clutching in the middle signals consolidation.
Relative Strength Index or RSI presently at 27.89 within the oversold region indicating probability of exhaustion from the recent downtrend direction.
Moving Average Convergence Divergence or MACD histogram signal lines provides bearish while the narrowing bars signify a probability decrease in downtrend pressure.
Average True Range or ATR its present reading of about 0.592 signify as the latest degree of market volatility.
We can see during the past weeks how the commodity’s sensitivity to the headlines and the resistance level may remain since there is no aggressive reaction due to lack of significant fresh escalation.
Source: Bloomberg
Key Drivers for Market Movement aside from the Middle East headlines affecting transit flows.
OPEC+ Unity: Keep an eye for any hint of internal related issues relevant to other members pushing for higher quotas which would further reflect on prices.
Source: CNBC
Source: CNBC
Inventory: API Crude Inventories
EIA Crude Stocks Change
Denomination effect or USD strength from the following economic indicators:
US ISM Manufacturing
Conclusion & The ACY Edge
Boosted economic print may support the US Dollar stability and usually creating a headwind for dollar-denominated assets like the West Texas Intermediate.
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