WTI bears are in the market testing $75.60 support ahead of US NFP

• WTI bears are in the market as the countdown to NFP is underway.
• WTI dropped around 1% on the third day of losses.

West Texas Intermediate is down by some 1% on the day in late Wall Street trade. The black gold fell from a high of $78.01bbls to a low of $75.63 despite a softer US Dollar ahead of Friday's main event for the week in the US Nonfarm Payrolls.

The US Dollar index was last seen down 0.4 points to 105.17 yet oil remains heavily offered. ''Trend signals in WTI crude have been bolstered by Chair Powell's hawkish rhetoric during his Congressional testimony. With downside momentum signals firing on all cylinders, CTAs have bolstered sufficient dry-powder to raise the risk of yet another round of short covering,'' analysts at TD Securities argued. ''This has been typical behavior over the last few months, in line with range-bound price action in energy markets.''

Oil is also pressured this week due to recession worries as the Federal Reserve turned hawkish. A series of data releases have been showing the US economy continues to run hot.  However, data released on Thursday took some of the sting out of Fed Chairman Jerome Powell's hawkish tone.

US jobless claims leaped by 11% last week. This was the heaviest move up in five months. Planned layoffs for February quadrupled year-on-year. This data might be indicating that the Federal Reserve's hiking cycle has been playing out as intended and negates the need to hike aggressively. Consequently, all three major US stock indexes were up and the US Dollar has drifted lower in a correction from a  three-month high near 105.90 printed at the start of the week.

US Nonfarm Payrolls eyed

Next up, Friday's Nonfarm Payrolls and next week's Consumer Price Index will be instrumental in guiding market expectations regarding the policy guidance likely to be offered by the FOMC at the March meeting.  

''We look for payroll gains to mean-revert to 230k in February following the gangbuster report that saw job creation surge to 517k in January,'' analysts at TD Securities said. ''We also expect the Unemployment Rate to remain unchanged at a historically low level; while average hourly earnings likely accelerated to a 0.4% m/m gain, lifting the YoY measure to a still-elevated 4.8%.'' The analysts added, ''we think the hurdle is rather high to see USD weakness prevail; data would have to materially surprise to the downside.''