WTI: Bears eye $ 66 amid notable USD demand, as focus shifts to EIA data

• Broad USD strength, bearish API data and demand concerns continue to undermine oil prices.
• Technical set up also points to further downside, as bears target $ 65.50-65 support area.

WTI (oil futures on NYMEX) is seen breaking lower from its bearish consolidative-mode, as bears look to test the monthly-lows of $ 66.38 amid persistent US dollar buying across the board.

The greenback remains broadly bid following Fed Chair Powell’s upbeat outlook on the US economy and interest rates. Also, markets prefer to hold the world’s reserve currency, the USD, in light of the US-China trade tensions and looming Brexit uncertainty. A stronger greenback makes the US dollar-denominated oil more expensive to the holders in foreign currencies.

Moreover, Tuesday’s bearish US crude stockpiles data published by the American Petroleum Institute (API) also continued to exert downward pressure on the prices. The API showed an unexpected a rise of more than 600,000 barrels in national crude inventories. Analysts had forecast a decline of 3.6 million barrels in U.S. crude stocks for the week through July 13.

Furthermore, increased demand concerns for the commodity, as markets fret over a slowdown in the global economic growth amid escalating US-China trade tensions, also add to the weight on the black gold.

Attention now turns towards the official US government numbers on the crude inventories that will be published by the Energy Information Administration (EIA due at 1430 GMT.  

WTI Technical Levels:

FXStreet’s Analyst Joshua Gibson, notes, “while June’s lows near 63.50 is putting a floor underneath any potential moves lower; with the severity of the recent drop on the technical charts,  resistance  is firming up at the last swing low of 69.25, with the year’s highs nearby at 75.35 per barrel.”