U.S. crude prices pulled back from around $63.50, hinting that the longer-term downtrend for “Black Crack” might not be over just yet.
We’re watching the 4-hour chart closely to see if WTI crude makes a run back to its April and May lows!
WTI Crude Oil (USOIL) 4-hour Chart by TradingView
Risk appetite got a lift on Monday as U.S.-China trade tensions cooled, which briefly boosted oil prices on hopes of stronger demand.
But that was yesterday’s news.
Fresh progress in U.S.-Iran nuclear talks in Oman is fueling expectations that sanctions on Iranian crude exports could ease. At the same time, Trump signaling a willingness to join possible Russia-Ukraine ceasefire talks in Turkey is adding to the idea of more global supply down the line.
All this comes as fading trade tensions have taken pressure off the Fed to deliver aggressive rate cuts, supporting the U.S. 10-year yields and the dollar.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on WTI crude oil and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
USOIL jumped off the “Double Bottom” lows we flagged last week, but has since turned lower after testing the $63.50 zone. That area lines up with R1 ($63.14) on the Pivot Points and the upper boundary of a possible range on the 4-hour chart.
It’s also just under the 200 SMA, which has capped price gains since slipping below the 100 SMA in February.
So, are we seeing a bearish shift?
If red candlesticks keep stacking up, WTI could revisit $60.75, where the 100 SMA sits. It could even dip back to the $60.00 area, which lines up with the Pivot Point and mid-range levels.
But if bulls push past the $64.00 highs, there’s room to run toward the R2 ($65.29) level or the $66.00 psychological barrier near long-term trend line resistance.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!