Global growth seems to be more and more in peril as the economic data for many advanced countries is starting to roll over and some even continues to slip further contraction. The Chinese authorities don’t look intentioned to flood the economy with more stimulus as the PBoC underdelivered on the rate cuts front recently. The global PMIs continue to contract and recently even the services sector slipped into contractionary territory for many major economies. The central banks are resolute to keep monetary conditions tight for as long as necessary to bring inflation down, so there won’t be any help coming from them in the near future. Yesterday we even got big misses in the US Job Openings and Consumer Confidence data which is potentially a signal that we are about to see more weakness in the labour market.
WTI Crude Oil Technical Analysis – Daily Timeframe
On the daily chart, we can see that Crude Oil tried to break out recently but got rejected strongly leaving behind a fakeout, which is generally a reversal signal. The moving averages are crossed to the downside and the price, despite the recent big pullback, has not yet made a new higher high, so the bias remains bearish.
WTI Crude Oil Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we recently had a divergence with the MACD just when the price was trying to break down, but eventually we got a strong bounce back and the price retreated all the way back to the recent swing high around the $81.75 level. That’s where we can expect the sellers to step in with a defined risk above the swing high and target the $75.00 support.
WTI Crude Oil Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the short term bullish momentum seems to be waning right at the resistance increasing the chances of a reversal. If the price breaks higher decisively, we can expect more buyers piling in and extend the rally into the key $83.00 resistance targeting a breakout. On the other hand, if the price starts to fall from here and even breaks below the recent swing point around the $80.85 level, then the sellers will be even more in control and target a break below the recent support around the $79.00 level.
Upcoming Events
This week is an important one given that we will see many key labour market data for the US, including the NFP, before the next FOMC meeting. Weak data is likely to cause recessionary fears across the markets and weigh on Crude Oil, so it will be crucial to focus on the data. Today, we have the US ADP report, and after yesterday’s big miss in the US Job Openings, a weak report is likely to increase recessionary fears. Moving on to tomorrow, we will see the US Jobless Claims and the US PCE data. Finally, we conclude the week with the the US NFP and the ISM Manufacturing PMI on Friday.
See also the video below
