Quick overview
WTI crude oil is trading at $63.00, after a 2% decline yesterday. The market is consolidating as traders weigh geopolitical tensions and trade disputes. The backdrop is still tense. Russia and Ukraine are striking each other’s energy infrastructure, and the US is doubling tariffs on certain Indian goods to 50% as India continues to buy oil from Russia. But analysts say supply risks are limited as Indian refiners plan to keep most of their Russian purchases.
Meanwhile, uncertainty over the Fed’s independence has seeped into the broader market and investors are cautious on risk assets. Helping prices, API data showed US crude inventories fell 1 million barrels last week, less than the 1.7 million expected but still a drawdown.
WTI Technicals Weaken
On the 4-hour chart, WTI crude oil is at $63.24, just above the 50-period SMA at $63.12. The market has broken out of the short-term ascending channel and momentum is softening. A failed rally at $64.31 produced multiple rejection wicks, indicating selling pressure and lack of buying conviction.
Momentum indicators agree. The RSI at 45 is rolling lower from recent highs, not oversold yet. The MACD histogram is negative and both lines are trending down, bearish pressure.
WTI Crude Oil Price Chart – Source: Tradingview
Key levels to watch:
Upside breakout: Above $64.31 targets $65.12 and $66.34.
Support zone: Holding $63.08-$63.12 keeps structure intact.
Downside risk: Below $63 could take it to $62.53 and $61.64.
Crude Oil Trading: Breakout Setup
For traders, the trade is in the breakout. Longs become attractive if crude clears $64.31, targeting $65.12 and $66.34. Shorts favor a breakdown below $63.00, $62.53 and $61.64.For now, WTI is stuck in a battle between softening momentum and geopolitics. Something big will happen in September.
Arslan Butt
Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.
His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.
His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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