On the daily chart below for
XTIUSD, we can see that the price is now threatening a major breakout of the
range. The market has been stuck in this range since December 2022. We got a
breakdown in mid-March as the market feared an immediate recession due to the
little banking crisis after the Silicon Valley Bank collapse.

As the Fed backstopped the crisis
with emergency lending tools and the fear faded, the price rebounded and came
back into the range. Then we got a surprise OPEC+
production cut the last week that made the market to gap up and
open $6 higher than the previous close. That gap hasn’t been filled yet and the
market kept on bidding with the price now at the top of the range.

XTIUSD technical analysis

On the 4 hour chart below, we can
see more closely the price action and the gap created by the OPEC+ news. It’s
also worth noting that the latest push to the upside is diverging with the MACD. This may be a sign that the
momentum isn’t really there, and it may turn into a fakeout.

Today we have the US Jobless Claims report and the market may go
into risk-off if the data miss again expectations signalling that the labour
market may be finally weakening. This should be bearish for oil as the market
will look at lower demand ahead. If the data beats expectations, then we may
see a real breakout and oil may reach the $90 handle.

On the 1 hour chart below, we can
see how the price is about to break yesterday’s high. The buyers may want to
wait for the economic data to confirm the breakout and pile in aggressively.
The sellers, on the other hand, will want to see worse economic data and a
further confirmation from the technicals, where a break below the trendline would end the strong bullish
momentum and bring the price down to fill the gap.

This article was written by ForexLive at www.forexlive.com.