- WTI recovers above $73 due to investors' caution due to the worsening of the Middle East crisis.
- Weak Chinese third-quarter GDP data could slow oil price recovery.
- The Dollar Index rises above 103.00 as bets for a Fed rate cut in March have eased slightly.
He West Texas Intermediate (WTI), futures on NYMEX, has risen to near $73.50 as investors see a sharp tightening in oil supply amid fears of more airstrikes by Iran-backed Houth rebels against commercial shipments. from the Red Sea, including American ships. The Houthi group has threatened to continue attacks on merchant ships in retaliation for airstrikes launched by the US military group against forces in Yemen.
The price of oil records a strong recovery despite the advance of the US Dollar Index (DXY). The Dollar Index has marked a new weekly high above 103.00, as investors are reconsidering their bets for rate cuts by the Federal Reserve (Fed) in March.
Meanwhile, investors await China's fourth-quarter gross domestic product (GDP) data, due out on Wednesday. Annual GDP is expected to register strong growth of 5.3%, up from 4.9% previously reported. While quarterly GDP growth is forecast at 1.0%, slower than the previous quarter's 1.3% increase due to the vulnerability of the economic outlook.
It should be noted that China is the world's largest oil importer and a strong recovery in the Chinese economy will strengthen the price of oil.
WTI oscillates in a symmetrical triangle chart pattern formed on a four-hour scale, indicating a sharp contraction in volatility. The 200-period exponential moving average (EMA) around $73.60 acts as a roadblock for oil price bulls.
The Relative Strength Index (RSI) (14) continues to oscillate in the 40.00-60.00 range, indicating that investors are awaiting a possible trigger.
A bullish reversal could occur if the asset breaks above the January high at $75.28. This would take the asset towards the December 26 high of $76.22, followed by the November 20 high of $78.46.
On the opposite side, the oil price could face a sell-off if it falls below the lows around $71.00 on January 10. This would drag the asset towards the psychological support of $70.00 and the December 7 low of $69.00.
WTI four-hour chart
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
