WTI Oil Tries To Settle Above $84 As Dollar Declines

Key Insights

• WTI oil is moving higher as traders wait for OPEC+ production cuts. 
• U.S. dollar’s pullback provides significant support to oil markets. 
• WTI oil managed to settle above the 20 EMA and will try to gain additional upside momentum. 

WTI Oil Continues To Move Higher

WTI oil is currently trying to settle above the $84 level as the strong rally in commodity markets continues.

Traders remain focused on the potential production cuts from OPEC+, which may exceed 1 million bpd.

The general optimism in global markets also provides support to oil prices. This optimism was triggered by the recent decline in government bond yields in the U.S. and elsewhere.

It remains to be seen whether this optimism will be sustainable as inflation will likely remain a big problem for most developed economies in the upcoming months.

Perhaps, some traders are ready to bet that central banks will be less hawkish due to the slowdown of the world economy. However, this scenario is bearish for oil as weaker economic activity will put pressure on oil demand.

The pullback of the U.S. dollar also provides support to oil while traders are waiting for OPEC+ decisions. The American currency is up by more than 15% against a broad basket of currencies in 2022, so any pullback is welcome news for commodity markets.

WTI Oil Settled Above The 20 EMA

WTI oil managed to get above the 20 EMA, which is located near $83.50, and is trying to settle above the $84 level. The next resistance level is located at $86.20. RSI remains in the moderate territory, so there is plenty of room to gain additional upside momentum.

If WTI oil moves above the resistance at $86.20, it will head towards the 50 EMA at $88.40. A successful test of the resistance at the 50 EMA will push WTI oil towards the next resistance at $90.30.

On the support side, the nearest support level for WTI oil is located at the 20 EMA at $83.50. A move below the 20 EMA will push WTI oil towards the support at $81.20. In case WTI oil settles below $81.20, it will head towards the next support at $78.

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