WTI testing $75.60 support ahead of US NFP data

WTI bears are active in the market as the NFP data release is approaching. The third day of losses for WTI saw a decrease of almost 1.53%. In late Wall Street activity, West Texas Intermediate is down almost 1% for the day. Notwithstanding a weaker US Dollar before Friday’s US Nonfarm Payrolls, the black gold slid from a high of $78.01bbls and the American crude oil is trading at $75.55 per barrel at the time of writing.

The US Dollar index was recently seen at 105.17, down 0.4 points, but oil prices are still very low. Fed Chair Powell’s hawkish tone during his Senate hearing has strengthened trend indications in WTI crude. According to analysts, CTAs have increased the possibility of yet another round of short covering because bearish momentum signals are blazing at full throttle. This pattern has been consistent over the past few months and is consistent with range-bound price movement in the energy markets.


This week, oil is under pressure as well as a result of concerns about a recession and a hawkish Federal Reserve. A number of data releases have demonstrated that the American economy is still booming. Nonetheless, data made public on Thursday lessened the impact of Fed Chairman Jerome Powell’s hawkish stance.

US unemployment claims last week increased by 11%. The rise higher was the biggest in the previous five months. February’s anticipated layoffs have increased fourfold since last 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. The US Dollar has been drifting lower in a correction from a three-month high at 105.90 recorded at the start of the week. As a result, all three main US stock indices were up.

The following two data points will be crucial in setting market expectations for the policy advice that the FOMC is anticipated to provide at its March meeting: Friday’s Nonfarm Payrolls and next week’s Consumer Price Index.

Following the gangbuster data that showed job creation surging to 517k in January, analysts anticipate payroll gains to mean-revert to 230k in February. Several observers anticipate that the historically low unemployment rate will remain steady, while average hourly earnings are anticipated to have advanced to a 0.4% m/m gain, pushing the YoY measure up to a still high 4.8%. The bar for USD weakness to prevail is rather high; data would need to dramatically surprise to the downside.