WTI hits multi-month highs on USD weakness

• WTI topped $83 and hit its highest point since mid-April, advancing more than 1.70%.
• The WTI barrel is on its sixth consecutive winning streak, and indicators point to overbought conditions.
• The dollar weakened after the NFP figures, which revealed a slowdown in job creation in July.

At the end of the week, a barrel of West Texas Intermediate (WTI) reached a daily high above $83.00 for the first time since April. Expectations of oil production cuts by the Saudis and the weakness of the US dollar are mainly responsible for the bullish trajectory of black gold.

On the US side, mixed data has been released. On the one hand, the US Bureau of Labor Statistics published its non-farm payrolls, according to which the US economy added 187,000 jobs in July, below the 200,000 expected, but above the previous figure of 185,000. . In addition, the unemployment rate stood at 3.5%, below the consensus and the latest figure of 3.6%. On the other hand, average earnings per Hour stood at 4.4% year-on-year, above the 4.2% expected.

In reaction, the dollar weakened due to the dovish expectations of the Federal Reserve (Fed) after the slowdown in the pace of job creation, and investors seem not to take into account the wage increase. It is worth noting that higher rates tend to be negatively correlated with oil prices, as more aggressive monetary policy tends to cool economies, so dovish bets on the Fed and a weaker dollar favor oil prices. WTI.

With Jerome Powell stressing that ongoing decisions are data dependent, attention now turns to next week’s July US Consumer Price Index (CPI) figures, which are expected to have slowed down

WTI levels to watch

The daily chart indicates a bullish trend for WTI in the short term. The Relative Strength Index (RSI) is above its midline in positive territory, sloping upward, aligning with the positive signal of the Moving Average Divergence (MACD), showing green bars, and reinforcing the strong bullish sentiment. . Furthermore, the pair is sitting comfortably above the 20-, 100-, and 200-day Simple Moving Averages (SMAs), indicating that bulls dominate the big picture.

That being said, both the RSI and MACD are close to overbought conditions, so a technical correction should not be ruled out in the coming sessions.

Resistance levels: $84.00, $85.30, $86.00.
Support levels: $79.50, $79.00, $78.00 (20-day SMA).

WTI daily chart