WTI trims a part of its intraday losses, keeps the red around $84.20 despite Middle East tensions

• WTI kicks off the new week on a weaker note, though lacks follow-through and remains confined in a familiar range.
• The uncertainty over the impact of the Israel-Hamas war holds back traders from placing aggressive directional bets.
• Traders also prefer to wait on the sidelins ahead of this week’s key central bank event risks and important macro data.

West Texas Intermediate (WTI) Crude Oil prices come under some renewed selling pressure on the first day of a new week and reverse a major part of Friday's positive move. The commodity, however, manages to rebound from the early Asian session low and currently trades around the $84.20 region, still down nearly 0.80% for the day.

Looking at the broader picture, Oil prices remain confined in a multi-day-old trading ban as market participants struggle to gauge the actual impact of the Israel-Hamas war and whether it could disrupt oil supplies from the region. This, in turn, holds back traders from placing aggressive directional bets around the commodity and leads to a range-bound price action. The upside, meanwhile, seems limited in the wake of growing worries that economic headwinds stemming from rapidly rising borrowing costs will dent fuel demand.

Furthermore, traders prefer to wait on the sidelines ahead of the official PMIs from China for cues about business activity in the world's biggest oil importer. Investors this week will further take cues from key central bank event risks – starting with the Bank of Japan (BoJ) meeting on Tuesday, followed by the FOMC decision on Wednesday and the Bank of England (BoE) on Thursday. Apart from this, the prelim Euro Zone GDP prints, along with the US jobs report (NFP), should provide some meaningful impetus to Crude Oil prices.

In the meantime, a modest US Dollar (USD) uptick, bolstered by elevated US Treasury bond yields and hawkish Federal Reserve (Fed) expectations, is seen as a key factor undermining the US Dollar-denominated commodity. From a technical perspective, the recent range-bound price action points to indecision among traders over the near-term trajectory. This, in turn, makes it prudent to wait for a sustained move in either direction before placing aggressive bets around Crude Oil prices.

Technical levels to watch