The WTI crude oil prices are consolidating in a narrow trading range of 42.91 - 41.50. Despite the on-going tussle between the US-China over the TikTok and Huawei issue, the Dragon Nation recently confirmed that the trade deal between the US-CHina remains intact. He further added that China and the U.S. had a constructive conversation on the trade agreement. As per the keywords, "China says both sides agreed to continue pushing forward implementation of phase 1 trade deal." However, these updates are positive for risk sentiment and might support oil prices.
On the contrary, the newest downbeat comments from the U.S. health official Anthony Fauci pours cold water on the face of the U.S. administration's struggles to fast-track the coronavirus treatment. "Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, refused to explain on the president but said there are risks in rushing out a vaccine despite the urgent need, as per the Rueter reports.
Hence, the crude oil gains were also limited by the long-lasting concerns over the U.S. stimulus package. The U.S. policymakers have not yet give any fresh clue over the U.S. stimulus package. However, the package's hurdles were intensified further after the House Speaker Nancy Pelosi took a U-turn from her previous readiness to cut the demands in half.
At the USD front, the broad-based U.S. dollar failed to maintain its previous day positive momentum and edged lower on the day as doubts over the U.S. economic recovery remain ahead of Fed Chairman Jerome Powell's speech at Thursday's Jackson Hole symposium themed. The losses in the U.S. dollar could also be attributed to the uptick in the U.S. stock futures. The losses in the U.S. dollar kept the oil prices higher as the price of oil is inversely correlated to the U.S. dollar. Whereas, the U.S. dollar index that tracks the greenback against a basket of other currencies trimmed down 0.11% to 93.207 by 9:48 PM ET (2:48 AM GMT).
Moving ahead, the market traders will keep their eyes on the U.S. Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole symposium, which is scheduled to open on Thursday. As well as, the U.S. August consumer confidence and the API inventory data, prior -4.264M, will be key to watch. In the meantime, the USD moves and coronavirus headlines will also closely followed as they could play a key role in the oil prices.
Daily Support and Resistance
Pivot Point 42.58
On the technical side, the WTI crude oil is trading with a neutral bias at 42.56. In the 4 hour chart, the WTI has formed an ascending triangle pattern, which is extending resistance at 42.89 and support at 42. Violation of support level can drive more selling until 41.59 level. Conversely, the bullish breakout of 42.89 level can extend the buying trend until 43.47. The RSI and 50 EMA are sorts of neutral as traders wait for a breakout. Let's consider taking a trade upon a bullish or a bearish breakout. Good luck!