Oil Boosted By Strong US Jobs Data and Looming OPEC+ Supply Cuts.

Oil has been under immense pressure recently; however, the WTI Crude Oil Futures (NYMEX: CL) rose slightly on Friday as recessionary concerns were subdued, at least in the short term, after the release of the US NFP data. The strong US jobs data eased concerns about a looming economic recession from the world’s largest economy that had put pressure on the oil and helped the futures close the Friday trading session 4.05% higher.

The concerns of a slow economy and oil demand on the recessionary concerns and the US banking crisis drove the commodity lower during the week. However, the weak dollar and the expectation of supply cuts from OPEC+ in June gave support, with the robust US jobs data boosting the oil futures. The economic concerns will continue to dominate the market sentiment ahead of the inflation data due on Wednesday as investors try to gauge the economic and monetary policy direction in the immediate future.


The 4H chart shows that the oil futures have experienced intense selling pressure and increased volatility in the sentiment, which is driving the futures lower, forming the descending broadening wedge pattern.

Following the rejection of the support level and the break above the golden ratio, the bulls could look to sustain the rally and test the upper trendline of the wedge. A sustained break above the upper trendline would boost the bulls’ run towards the $74.30/BLL resistance level. A break above the $74.30/BLL resistance level at high volume would bring the $75.79/BLL resistance level firmly in play.

However, the bulls’ failure to sustain a break above the golden ratio would leave the bears to pull the price lower, with the 78.60% Fibonacci retracement level acting as immediate support. A break below the 78.60% Fibonacci retracement level would bring the $67.54/BLL and the $64.89/BLL support levels firmly in play for the bears.


The appearance of the broadening wedge suggests increased volatility and, if the fundamentals hold, could be suggestive of a potential break to the upside. The bulls’ would need to sustain a move above the golden ratio if they look to challenge the upper trendline of the wedge. However, failure to sustain a break above the golden ratio would leave the major support levels definitely in play.

Sources: TradingView, Reuters, MT Newswire.

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