WTI

Risk appetite made a swift comeback when the Fed opened the door to beginning their rate-cut cycle in September. The question is whether Wall Street indices, gold or WTI crude can extend their gains.

Stronger GDP, core durable goods orders and the drop in oil inventories have all helped to alleviate demand concerns somewhat, reducing the pressure on oil prices. After today’s reversal-looking price candle, our crude oil forecast has turned modestly bullish.

A combination of factors drew WTI crude oil bulls from the side line on Wednesday, which brings $85 back into focus. Gold didn’t have such luck despite hitting a record high the day prior.

Crude oil prices turned high on the session, with Brent finding good support from $84.00 and WTI around $80.50. We are still anticipating higher oil prices due to slower output growth in H2, which should means a tighter oil market. Therefore, our crude oil forecast remains bullish.

Recent softness in global data has weighed on oil investors’ expectations about the level of demand growth. Yet, some oil forecasters like the Energy Information Administration (EIA) continue to envisage higher oil prices, thanks largely to lower output growth. We also share this view and reckon oil prices are heading further higher in H2 as the market tightens. Our crude oil forecast thus remains bullish.

WTI crude oil has been respectful of Fibonacci retracements over the past few weeks. It’s also enjoyed a strong correlation with US S&P 500 futures. With Jerome Powell having little reason to remain hawkish later today, the recent pullback provides a decent entry level for longs looking for a boost to risk appetite.

West Texas Intermediate (WTI) crude oil was slightly off its best levels but remained on track to close higher for the fourth consecutive week as of late Friday. In the week ahead, keep an eye on crude inventories and consumer inflation data from the US.

Tuesday looms as a great day to wait and observe the price action in WTI crude following another powerful surge, leaving the benchmark at a key level it struggled to overcome in the past. Its performance may provide a strong signal on whether to get onboard the bullish move or get setup for shorts on a possible swing top.

With a solid US ISM services PMI print and rate cut from the Bank of Canada (BoC) helping to fuel the soft-landing narrative, the rout in WTI crude oil reversed on Wednesday, delivering a bullish technical pattern that points to the potential of further gains ahead.

Last week’s candle on the WTI crude chart provided an obvious signal on directional risks that came to the fore on Monday, combining with weak economic data out of the United States and belated surprise that OPEC+ will boost production levels later this year to send the price hurtling to lows not seen since February.

Crude oil analysis: ISM manufacturing PMI miss highlights demand worries after OPEC + failed to underpin prices with their latest decision to extend output cuts. WTI technical analysis is clearly bearish but watch out for oversold bounce as prices approach technical support levels.

An extension of deep and prolonged production cuts from OPEC has failed to ignite a rally in crude oil futures with prices sinking for a fourth consecutive session. However, with WTI returning to what’s been a reliable zone for bulls in the first five months of the year, these levels may prove tempting for those looking for a bounce given favorable risk-reward.

The OPEC+ supply outlook for WTI and Brent crude oil is a more potent driver of price action in the current environment than the US dollar.

USD/JPY closed above 157 for the first time since the MOF last intervened, which brings 158 into focus for bulls. Crude oil also rose over 3% on Tuesday from arguably oversold levels.

The rout in commodity prices didn’t last long, as expected, with dip buyers emerging late last week to take advantage of better entry levels. Crude and copper look particularly constructive following the recent bounce.

The pullback has seen WTI move into what’s a been a very decent buying zone in recent years, providing an opportunity to establish longs at lower levels.

USD rallied against all FX majors except the pound on Wednesday following thanks to not-so-dovish FOMC minutes. AUD/USD now finds itself struggling to hold 66c.