- West Texas Intermediate crude oil (WTI) prices are on the rise still within a bearish rising wedge, now testing the 200-DMA – expected to hold.
- WTI is currently trading between $60.17bbls and $61.70bbls, ending North American trade at $61.65bbls.
The price of oil got a boost at the start the week with encouraging manufacturing data in both China and the US, (EZ was a disappointment again on that front). Also, there have been signs that trade talks between the US and China are moving in the right direction, gaining traction on the path towards a positive outcome and a trade agreement by the end of April, as the target date specified last month by the US administration.
- Eurozone March preliminary CPI +1.4% vs +1.5% y/y expected
- Germany March final manufacturing PMI 44.1 vs 44.7 prelim
- Eurozone March final manufacturing PMI 47.5 vs 47.6 prelim
- US ISM Manufacturing PMI beat expectations with 55.3 vs 54.5 expected.
All in all, the current climate is encouraging for traders who now expect a rise in global demand prospects. At the same time, surveys have pointed to further declines in output by members of the OPEC in March which helped lift Nymex West Texas Intermediate crude for May by $1.45, or 2.4%, to end at $61.59 a barrel.
WTI levels
WTI is testing the 200-D MA at the start of this week and on the verge of a break rising wedge’s prior resistance of 60.71. However, if 61.90 holds, 2018 April’s solid lows and touch above the 200-D SMA, bulls could be facing a washout to the downside and any subsequent stops could spark the beginnings of a major break out. A subsequent break below $57.80 could be the straw that broke the bulls back and, subsequently, would equate for a continuation of the bear trend that would target below the $42 handle and late Dec lows. The price could drop by at least the height of the wedge (measured at the base where the two trendlines start) which is around $12.00 for a target of $47.00. First up, bears will look to the $58.00 support/ and $58.47 as the 21-D SMA ahead of $55.50 (monthly pivot point) and the 38.2% Fibo meeting cloud support. Daily stochastics still lean with a bearish bias, now with a bearish divergence given Friday’s high was not met by a fresh high in momentum readings.
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