The WTI crude oil prices failed to extend its previous session bullish moves and took a U-turn from a one-week high and dropped to $39.68 level while representing 0.25% losses on the day. At the US-China front, the Dragon Nation recently introduced some terms for the U.S. media working on their homeland, mainly after the United States decided to impose sanctions on China in the wake of Hong Kong security law which eventually added strength to the downbeat trading sentiment and capped further gains in the oil prices.
Whereas, the reason for the modest positive risk tone in the market could be associated with the reports of another vaccine trial, which showed positive results for COVID-19. It is worth mentioning that the U.S. Pharmaceutical giant Pfizer (NYSE: PFE) reported results from an early-stage human trial for BNT162b1, one of four mRNA candidates currently under development by the company and Germany's BioNTech (NASDAQ: BNTX), on Wednesday. An increased number of cases are consistently weighing on the crude oil and keeping the bullish trend in check.
Besides, the market participants will keep their eyes on the key U.S. employment figures for June before forecasting near-term moves. The next direction of the currency pair will be decided by the U.S. payrolls report, which is forecasted to show the economy added 3,000K jobs in June after May's 2509K additions. Whereas, the unemployment rate is forecasted to increase to 7.7% in June from 7.3% in May. Whereas, Average Hourly Earnings are anticipated to have soared by 5.3% year-on-year in June, marking a slowdown from May's increase of 6.7%. The weaker labor market may also weigh on the oil prices as the major consumer of crude oil, the U.S. will consider dropping its demand over slow economic activity.
Daily Support and Resistance
Pivot Point 39.77
Technically, the WTI has is trading within an ascending triangle pattern at 40, implying probabilities of an extension of the bullish trend if the WTI breaks over 40.60 level. Crude oil prices could rise sharply towards the next target level on the 40.50 and 41.69 level today. The support extends to hold at 39.50 – the resistance mark, which is presently serving as a support. At the moment, the RSI and MACD are recommending buying. Hence, we have initiated a buy trade in crude oil, with a target of 40.30, and then if the market manages to break over 40.50, we can take further buy. Good luck!