Oil, Natural Gas, and US Dollar Technical Analysis: Global Risk and Geopolitics Limit Upside

WTI crude oil (CL) increased to $62.10 in early Tuesday trading. This price increment was due to the nuclear talks between the US and Iran, which showed signs of collapse. Iran warned that negotiations would fail if the US demands a complete halt to uranium enrichment. The US insists on zero enrichment, raising geopolitical tensions. These developments limited the possibility of an increased Iranian oil supply, which supported crude oil prices.

However, bearish factors continue to weigh on the oil market. Moody’s downgraded the US credit rating from ‘Aaa’ to ‘Aa1’. The agency cited unsustainable deficits and rising interest costs. This downgrade raised concerns over the health of the US economy. As the world’s largest oil consumer, weaker US growth could reduce oil demand. This adds downside pressure to WTI crude oil despite recent gains.

Moreover, slowing demand in China also threatens oil price stability. The chart below shows retail sales in April rose only 5.1% year-over-year, missing the 5.5% forecast and down from 5.9% in March. As the world’s top oil importer, weak consumer spending signals softer demand for crude. Economic uncertainty in the US and China limits the upside for WTI crude oil and increases the risk of another pullback below $60.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Rebound

The daily chart for WTI crude oil shows the price consolidating below the long-term resistance zone at $65. The rebound from $55 has failed to break above the $65 level, and the price continues to consolidate below the 50-day SMA. Additionally, the 50-day SMA remains below the 200-day SMA, indicating ongoing bearish pressure. A break below $55 would confirm continued bearish momentum, while a breakout above $65 could signal a move toward the $70 level.

WTI Oil 4-Hour Chart – Descending Broadening Wedge

The 4-hour chart shows the price consolidating within a descending broadening wedge pattern. The rebound from $55 has been capped below $64. The price is currently consolidating between $60 and $64, and a breakout above or below this range will indicate the next directional move. Strong resistance remains in the $70 to $71 zone, and a break above this area would signal bullish momentum.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Key Level of $3

The daily chart for natural gas (NG) shows that the price is consolidating below $3.60. However, the overall price action remains bullish. This bullish setup formed after a breakout from the cup and handle pattern, confirming $3 as strong support. A break below $3 would signal further downside, with prices likely to decline toward the $2.70 level.

Natural Gas 4-Hour Chart – Consolidation

The 4-hour chart for natural gas also shows that the price is consolidating between the $3.00 and $5.00 levels. The rebound in May failed at the $3.80 resistance, and the price continued to move lower toward $3.00. A breakout from the $3.00–$5.00 range will determine the next directional move in natural gas prices.

US Dollar (DXY) Technical Analysis

US Dollar Daily Chart – Bearish Pressure below 50-Day SMA

The daily chart for the US Dollar Index shows that it remains under bearish pressure after rejecting the 50-day SMA. The RSI is also below the midline, indicating continued bearish momentum. A break below 98 would signal further downside toward the 96 area. A breakout above 103.50 is needed to ease the current bearish pressure on the index.

US Dollar 4-Hour Chart – Descending Channel

The 4-hour chart for the US Dollar Index shows that it remains within a descending channel. The rebound from the 98 area reached resistance near the 102 level. After hitting this resistance, the index began consolidating lower. This resistance is also confirmed on the daily chart, where it aligns with the 50-day SMA.