WTI OIL – narrow consolidation likely to precede push through $80 barrier

WTI contract is trading within a narrow range just under new three-month high ($79.87) and psychological $80 barrier, as traders reduced speed ahead of key event – Fed rate decision.

The US central bank is widely expected to raise interest rate by 25 basis points, but with growing signals that a cycle of sharp policy tightening which lasted over one year, is nearing its end.

Oli price was also pressured by much smaller than expected draw in US oil inventories (600 mln bls vs 2.34 mln bls forecasted), though immediate impact from data was so far minor, as last month’s additional production cut by Saudi Arabia and Russia, continues to underpin the price.

Bulls are likely to face increased headwinds from psychological $80 barrier, with overbought daily studies contributing to idea of limited consolidation, before larger bulls break $80 pivot and resume larger uptrend from a higher base at $67.00 zone.

Extended dips should find ground above rising 10DMA ($76.76) which also formed a golden cross with 200DMA and additionally underpin the action.

Firm break of $80 level (reinforced by 55WMA) to further firm near-term structure and open way for test of 2023 high at $83.51 (Apr 12).

Res: 80.00; 81.75; 83.10; 83.51
Sup: 78.82; 78.26; 77.31; 76.76