- WTI struggles to carry the recovery gains.
- The US dollar registers broad weakness as markets cheer nearness to the COVID-19 Bill.
- Fed announced unlimited QE the previous day, coronavirus risk prevails.
- API data, global activity gauges in the spotlight.
Despite marking 2.77% gains on the daily chart, WTI fails to remain above $25.00, currently around $24.87, ahead of the European session on Tuesday. While the broad risk reset seems to offer mild strength to the energy benchmark, buyers seem to wait for fresh clues to confirm the recent recovery. In doing so, preliminary readings of the monthly PMI data and the weekly US oil inventory data from the private provider, namely the American Petroleum Institute (API), will be important to watch.
Following the Fed’s unlimited QE, the US policymakers are jostling in the Senate to pass the Republican-backed package to combat the coronavirus (COVID-19). Even so, US President and Treasury Secretary Steve Mnuchin signal optimism concerning the estimated $2 trillion Bill.
Risk tone seems to recover with the US 10-year treasury yields and Asian stocks while COVID-19 numbers from China indicate the light at the end of the tunnel.
However, numbers from the US, Italy and the rest of the key global players, like Russia and Saudi Arabia, keep signaling the fears of the deadly pandemic.
While the recent pullback in the US dollar seems to help the energy benchmark, investors will wait for the key activity numbers from the US, the UK and the Eurozone for fresh impulse. For oil-specific news, the weekly API data, with -0.421 M prior, will be the key.
Technical Analysis
A seven-day-old falling trend line and 38.2% Fibonacci retracement of March 11-18 fall, near $26.70, guards immediate upside while sellers may seek entries below $22.00.
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