• WTI got bolstered by a soft US Dollar, though it struggled to break above solid resistance.
  • The deceleration in US Consumer Price Index (CPI) and expectations for a Fed pivot can underpin WTI prices.
  • WTI Price Analysis: Faces a wall of resistance around $79.00.

Western Texas Intermediate (WTI), the US crude oil benchmark, advanced 0.98% on Thursday and extended its gains to two consecutive days, though it is clashing around technical indicators after releasing crucial US inflation data. At the time of writing, WTI is trading at around $78.40 per barrel.

The US Consumer Price Index (CPI) for December dipped 0.1%, as reported by the Department of Labor (DoL), suggesting that the US Federal Reserve (Fed) could slow down the pace of rate increases, a headwind for the greenback. Therefore, oil prices increased, as a weaker US Dollar would benefit crude buyers.

Another factor that bolstered WTI is China’s reopening after authorities removed Covid-19 zero-tolerance policies.

Sources cited by Reuters commented that a soft landing in the US and maybe worldwide, combined with China’s economic rebound, could make for a much better year than feared by most street analysts. Hence, oil demand could rise, and WTI prices would remain elevated unless the output is increased.

Oil traders are also bracing for an additional curb on Russian oil supply, as sanctions over its invasion of Ukraine are pending to begin. The EU ban on importing petroleum products from Russia will start on February 5, and according to the US EIA office, “it could be more disruptive than the EU ban on importing crude oil from Russia.”

WTI Price Analysis: Technical outlook

From a daily chart perspective, WTI is neutral to downward biased, albeit extending its gains to almost $4 in the last couple of days. WTI’s inability to crack the confluence of a two-month-old downslope trendline and the 50-day Exponential Moving Average (EMA) around $79.00 could exacerbate a retracement, at least to the 20-day EMA at $76.79. However, if WTI breaks above the former, it can rally toward $80.00. On the flip side, once it clears $78.00, that could pave the way toward the $76.00 figure.

This article was originally published by Fxstreet.com.Read the original article here.