The WTI oil price hit three-week low Tuesday, in extension of sharp fall in past two days (down over 4%) but drop was limited by daily cloud base and Fibo 61.8% of $72.44/$82.64 upleg) where bears faced strong headwinds, causing the price to bounce.
Prospects of stronger dollar on expectations for Fed’s further rate hikes (0.25% raise expected on Wednesday) weighs on oil prices, along with expectations for ECB and BOE 0.5% hikes (meetings are on Thursday), with signals that Russia’s oil exports are going to rise in February, despite tough sanctions imposed on Russia from western economies.
The OPEC+ group is also meeting on Wednesday and analysts expect the cartel will keep its current output policy unchanged.
On the other side, unexpectedly strong acceleration in China’s economic activity in post-Covid restrictions period, boosts hopes for strengthening demand that would partially counter negative impact.
Daily studies show weakening near-term structure on fading bullish momentum and MA’s in bearish setup, though negative signals were partially offset by oversold stochastic and strong bids at the base of thick cloud.
Repeated close above daily Kijun-sen ($77.54) would soften bears and add to signals of basing, however, more work at the upside, such as lift and close above daily Tenkan-sen ($79.57) that would unmask key barriers at $81.91 (daily cloud top) and $81.50/60 zone (recent peaks).
Res: 79.23; 80.00; 80.45; 81.70
Sup: 77.54; 76.25; 74.85; 73.64
