- US oil is fundamentally firm, but technicals momentum is slowing at daily resistance.
- FOMC and GDP data from the US will be key events.
In the open, US West Texas Intermediate (WTI) crude prices are bid +0.26% at $72.21 at the time of writing.
Energy markets have posted a strong recovery of late.
''Firm demand hindered shale supply and the cautious monthly increase in supply from OPEC+ should not be enough to prevent a deep deficit in the coming month, which should continue to fuel stronger prices and tightening spreads,'' analysts at TD Securities said.
WTI edged higher on Friday to close up by a modest 0.46%, extending deeper into daily resistance in a strong corrective recovery from Monday's steep slide and Tuesday lows of $65.11.
''With officials from well-vaccinated countries reluctant to reinstate harsh lockdown measures, the risk of demand growth faltering is diminishing,'' analysts at ANZ bank explained.
''In fact, gasoline demand in several major regions has returned to pre-pandemic levels amid rising road traffic data. Even the jet fuel market is showing signs of improvement.''
FOMC & key US data
On the cards for the week ahead, the Federal Open Market Committee will be key.
The Federal Reserve will have to deal with the reality of above-trend growth and higher than first expected inflationary pressures.
The idea of tapering will emerge in the fourth quarter of 2021, as well as the likelihood of the first hike coming in 4Q22, markets will be on edge.
We also have 2Q21 Gross Domestic Product growth this week. This is expected at 8-9% quarter-on-quarter annualized.
June readings for personal consumption and the PCE deflator, all arrive strong, the US dollar should continue to gain.
Subsequently, this could weigh on the commodity complex if the US dollar rallies.
However, oil prices were be expected to remain robust given the pace of the US economic recovery.
WTI technical analysis
Technically, the price is pressuring the critical resistance with 72.30 on the radar for the open.
A break there will level the bulls in good stead for a higher high in the coming days.
The 78.6% Fibonacci retracement of the prior daily bearish leg is located at 73.30.
Meanwhile, the monthly 61.8% Fibonacci retracement in the 64.50/60s support area is compelling:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds steady near 1.0650 amid risk reset
EUR/USD is holding onto its recovery mode near 1.0650 in European trading on Friday. A recovery in risk sentiment is helping the pair, as the safe-haven US Dollar pares gains. Earlier today, reports of an Israeli strike inside Iran spooked markets.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD is rebounding toward 1.2450 in early Europe on Friday, having tested 1.2400 after the UK Retail Sales volumes stagnated again in March, The pair recovers in tandem with risk sentiment, as traders take account of the likely Israel's missile strikes on Iran.
Gold: Middle East war fears spark fresh XAU/USD rally, will it sustain?
Gold price is trading close to $2,400 early Friday, reversing from a fresh five-day high reached at $2,418 earlier in the Asian session. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row.
Bitcoin Price Outlook: All eyes on BTC as CNN calls halving the ‘World Cup for Bitcoin’
Bitcoin price remains the focus of traders and investors ahead of the halving, which is an important event expected to kick off the next bull market. Amid conflicting forecasts from analysts, an international media site has lauded the halving and what it means for the industry.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.