WTI Price Analysis: WTI price soars after Powell’s testimony

• WTI jumped to its highest level since June 8, reaching $72.70.
• Powell didn’t deliver hawkish surprises, maintaining his stance from last Wednesday’s presser.
• A positive market mood and rising stocks fueled the rise in black gold.

The West Texas Intermediate (WTI) rose to its highest level in two weeks and then stabilized at $72.40 following Jerome Powell’s testimony before the US Congress. Despite hinting at additional hikes, he noted that the economy and the labor market remain strong, which fueled a positive market environment and a recovery in US stocks. In addition, the USD, measured by the DXY index, fell to 102.05, seeing more than 0.40% losses.

Stocks recover after Powell’s testimony

Before the US Congress, Jerome Powell, Chair of the Federal Reserve (Fed) of the US, stated that “nearly all FOMC participants expect it will be appropriate to raise interest rates somewhat further by year-end”. However, he brought optimism to markets stating that he sees wages moderating, and as he confirmed that the decision will remain data-dependent. Expectations of the Fed nearing the end of its tightening cycle strengthen the WTI as Oil prices tend to be negatively correlated with interest rates.

In addition, the US stock markets cleared part of daily losses following the comments but continued to correct the overbought condition seen in last week’s impressive gains.

For the rest of the week, the focus will shift to US Jobless Claims data on Thursday and S&P Manufacturing PMI data on Friday for investors to continue modeling their expectations towards the next Fed meeting in July. As for now, as per the CME FedWatch tool, investors are discounting a 25 basis point (bps) hike.

WTI Levels to watch

The daily chart suggests that the WTI holds a neutral to bullish stance for the short term. Despite indicators regaining traction and jumping to positive territory, the price still remains below the 100 and 200-day Simple Moving Average (SMA).

That being said, upcoming resistances line up at $73.00, followed by the 100-day SMA at $74.45 and the $75.00 psychological mark. On the other hand, supports are seen in the $72.00 area, followed by the 20-day SMA at $70.77 and the $70.00 zone.

WTI Daily chart