U.S. crude oil prices fell a rock despite a general weakness in the U.S. dollar.
What’s up with that?!
Are we looking at a pullback opportunity? Or the start of a longer-term reversal?
WTI Crude Oil Daily Chart by TradingView
In case you missed it, crude oil prices dropped sharply yesterday after the latest EIA crude oil inventories reflected a slightly larger-than-expected build in U.S. oil inventories.
It also didn’t help the commodity that we have not heard of notable escalations in the Middle East geopolitical conflicts.
It seems like the Black Crack isn’t getting support from broader market themes either. A bit of profit-taking has weakened the U.S. dollar while traders are mostly shrugging off FOMC members hinting at a “higher for longer” interest rate environment.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on crude oil and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
U.S. crude (WTI) oil prices still extended their decline below the $84.00 mark following a rejection from the $86.00 levels earlier this month.
Extended bearish pressure may provide an opportunity for WTI to reach the $78.00 – $80.00 zone that lines up with the S1 (78.86) Pivot Point line, 200 SMA, and trend line support in the daily time frame.
A bounce and then sustained demand at these levels could then provide a good risk ratio for those who remain bullish on crude oil prices.
On the other hand, a clear break or consistent trading below the long-term trend line support could lead to WTI prices revisiting 2024 lows closer to the $75.50 or $72.00 previous inflection points. We may even see the commodity revisit its December lows below $70.00!
What do you think? Is WTI seeing a pullback or the start of a longer-term bearish reversal?