WTI Price Analysis: Defends three-week support of $76.70 ahead of oil inventory data

• Oil price has turned sideways after defending three-week support of $76.70 ahead of UK EIA inventory data.
• Anticipation of more interest rate hikes from Western central banks is weighing heavily on oil prices.
• The USD Index has extended its correction to near 101.81 after a stellar upside move.

West Texas Intermediate (WTI), futures on NYMEX, have managed to find an intermediate cushion near three-week support of $76.70. The oil price is showing a sideways performance after defending the three-week low as investors are awaiting the release of the oil inventory data by the United States Energy Information Administration (EIA) for further guidance.

The US Dollar Index (DXY) has extended its correction to near 101.81 after a stellar upside move. A resumption for the upside move in the USD Index could impact the oil price further.

Meanwhile, the anticipation of more interest rate hikes from the Federal Reserve (Fed), the Bank of England (BoE), and the European Central Bank (ECB) to arrest stubborn inflation in their respective economies is weighing heavily on oil prices. Further interest rate hikes from Western central banks will trigger fears of economic slowdown and will eventually impact the oil demand.

The oil price witnessed a steep fall after dropping below the crucial support placed from April 03 low at $79.00, which is now acting as a barricade for bulls. The downside move in the black gold is expected to surrender entire gains generated after the surprise announcement of production cuts by OPEC+.

The 20-period Exponential Moving Average (EMA) at $77.75 is acting as a hurdle for the oil bulls.

Meanwhile, the Relative Strength Index (RSI) (14) has fallen back inside the bearish range of 20.00-40.00, advocating further weakness.

Going forward, a decisive downside below $75.00 will expose the oil price to March 30 low at $72.69 followed by the round-level support at $70.00.

On the flip side, a confident break above April 03 low at $79.00 will drive the oil price toward April 04 high at $81.80 and April 12 high at $83.40.

WTI two-hour chart