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Crude Oil Price Recovery Could Fade Near $85: Here’s Why

Aayush Jindal

Aayush Jindal

Market Analysis

Key Highlights

  • Crude oil price tested the $76.50 before it started a recovery wave.
  • A major bearish trend line is forming with resistance at $82.20 on the 4-hours chart.
  • Gold price might attempt a recovery wave above the $1,665 resistance.
  • The US GDP could contract 0.6% in Q2 2022.

 

Crude Oil Price Technical Analysis

Crude oil price saw a steady decline below the $88.00 support against the US Dollar. The price traded below the $82 and $80 support levels.

Looking at the 4-hours chart of XTI/USD, there was a break below the $78 level. The price settled well below the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

The price traded as low as $76.52 and recently started an upside correction. There was a move above the $79.50 level. It broke the 23.6% Fib retracement level of the downward move from the $90.17 swing high to $76.52 low.

On the upside, the price might face sellers near the $82.20 zone. There is also a major bearish trend line forming with resistance at $82.20 on the same chart.

The next major resistance is near $83.50 or the 50% Fib retracement level of the downward move from the $90.17 swing high to $76.52 low, above which the price could accelerate higher towards the $85.00 zone.

On the downside, an initial support is near the $78.40 level. The next major support is near $77.00. The main support sits near $76.50, below which there is a risk of a move towards the $75.00 level. Any more losses might call for a test of the $72.50 zone.

Looking at gold price, a minor recovery wave is underway, but the price must clear the $1,665 resistance to continue higher.

Economic Releases to Watch Today

  • US Initial Jobless Claims - Forecast 215K, versus 213K previous.
  • US Gross Domestic Product Q2 2022 – Forecast -0.6% versus previous -0.6%.