WTI Price Analysis: WTI challenges 20-day SMA ahead of PBoC decision
- WTI targets the 20-day SMA at $71.00, trading at the $71.20 area.
- PBoC expected to cut rates to 3.55% in the early Tuesday Asian session.
- Eyes on key economic data from the US.
The West Texas Intermediate (WTI) barrel trades with mild losses on Monday, nearing the 20-day Simple Moving Average (SMA) standing at $71.20. Eyes will be on the People Bank of China (PBoC) decision and, throughout the week, key economic data from the US to start shaping expectations towards the upcoming July meeting of the Fed on July 26.
Eyes will be on key economic data from the US
As Oil prices tend to be positively correlated with strong economic activity and negatively related with higher interest rates, this week’s release of economic data will have an impact on the black gold’s price dynamics. On Tuesday, the focus will be on housing data, which could provide insights into the strength of the real estate market. Subsequently, on Thursday, investors will closely monitor the Jobless Claims report, looking for indications of the labor market's health. Finally, on Friday, attention will shift to the S&P PMIs, which will offer valuable insights into the manufacturing and services sectors.
That being said, it's worth noticing that Jerome Powell opted for a rate hike pause in order to assess additional information and its implications on monetary policy, so the health of the US economy will be crucial for what the Federal Reserve officials decide in the next July meeting.
WTI Levels to watch
The WTI has a neutral outlook for the short term as indicators turned flat on the daily chart with no clear signs of bull or bears dominating. The Relative Strength Index (RSI) stands with a slight negative slope over its midline, while the Moving Average Convergence Divergence (MACD) prints green bars.
If WTI manages to move higher, the next resistances to watch are in the $72.00 area, followed by the $73.20 zone and the 100-day Simple Moving Average (SMA) at $74.50. In addition, the 20-day SMA at the $71.00 level is key for WTI to maintain its upside bias. If breached, the price could see a steeper decline towards the $70.50 area and psychological mark at $69.00.
