- WTI price is correcting from nearly three-week highs at $107.96.
- A stronger US dollar is testing the upside in black gold.
- A test of the 21 DMA support at $103.58 seems inevitable.
WTI (NYMEX futures) is extending the correction from the three-week high of $107.96 reached in the early hours of the Asian session on Easter Monday.
The relentless strength of the US dollar could be associated with the drop in the price of WTI, as it shows a three-day uptrend.
Growing concerns about demand for oil and its products from the world’s second largest oil consumer, China, contributed to the decline. China continues to battle covid outbreaks and with full lockdowns imposed on the nation’s major cities.
Crucially, black gold remains supported by the possibility of a protracted war between Russia and Ukraine, with a European Union (EU) embargo on the Russian oil and gas sector likely in the coming days.
From a short-term technical perspective, the corrective pullback in WTI points to the upsloping 21-day daily moving average (DMA) at $103.58. Although the bulls may find some support at $105.00 and $104.50 beforehand.
The 14-day Relative Strength Index (RSI) turns south, justifying the renewed weakness in US oil. The leading indicator, however, remains above its midline, which keeps the bulls hopeful.
On the other hand, if the bulls regain momentum, then the multi-week top near $108.00 could be retested.
The next significant upside target is seen at the $110.00 round level.
WTI: Daily Chart
WTI Technical Levels
Source: Fx Street
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