Oil, Natural Gas, and US Dollar Technical Analysis: Market Reaction to US-China Talks

WTI Crude Oil (CL) prices continue to consolidate in a range below the long-term resistance of $66. However, the price attempts a short-term recovery above $60 to de-escalate the US-China trade war. News of upcoming trade talks between the two nations has improved market sentiment. Traders view reduced tensions as a positive signal for global demand, especially since China is the world’s largest oil importer.

The commitment from US officials to focus on easing tariffs has added to optimism. Treasury Secretary Scott Bessent emphasized that the goal is not a big deal, but to cool down the tariff conflict. A softening trade stance would reduce pressure on global growth and boost energy demand, supporting oil prices in the short term.

However, the upside for oil may face limits due to OPEC+ decisions. The group announced it will accelerate production hikes, adding supply to the market. A 960,000 bpd increase in June could weigh on prices, especially as Kazakhstan pushes back against OPEC+ limits. The mixed forces of rising supply and improving demand define oil’s next move.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Bearish Pressure

The daily chart for WTI crude oil shows that the price has traded under pressure below $66. This consolidation increases the possibility of another decline toward $50. The 50-day SMA is below the 200-day SMA, sloping downward, indicating intense bearish pressure. Moreover, the breakout below the long-term support at $66 suggests that the price may continue declining.

WTI Oil 4-Hour Chart – Bearish Pressure

The 4-hour chart for WTI crude oil shows that the price is trading within a descending broadening wedge pattern. The price action below the long-term support of $66 indicates negative momentum. Moreover, the consolidation below the red line at $60 highlights the potential for further downside. The price needs to break above the $70–$71 zone to initiate an uptrend.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Key Level of $3

The daily natural gas (NG) chart shows strong bullish momentum above the $3 support level. This rebound developed at the strong support of the 200-day SMA, increasing the odds of further upside continuation. The price is currently challenging the 50-day SMA, and a break above this area will signal additional gains in natural gas.

Natural Gas 4-Hour Chart – Constructive Rebound

The 4-hour chart for natural gas shows that the rebound from $3 was constructive. A break above $4 will signal a strong rally. On the other hand, a break below $3 is unlikely but would indicate further downside. After being in oversold territory, the RSI is approaching the mid-level, suggesting that natural gas prices will likely continue higher.

US Dollar (DXY) Technical Analysis

US Dollar Daily Chart – Bearish Pressure

The daily chart for the US Dollar Index shows that it remains under bearish pressure and forms a head-and-shoulders pattern. The 50-day SMA slopes downward below the 200-day SMA, indicating a strong bearish trend. Moreover, the rebound toward 100.65, followed by a continuation to the downside, suggests that the index remains under long-term bearish pressure. A break above 100.65 is required to trigger further upside potential.

US Dollar 4-Hour Chart – Bearish Pressure

The 4-hour chart for the US Dollar Index shows that it remains within a descending channel and consolidates at lower levels. The inverted head-and-shoulders pattern emerged at the bottom of the channel but failed to break above 100.65, suggesting that the index may drop further. A break above 100.50 and then 102.75 is required to ease the bearish pressure on the 4-hour chart.