Crude Oil, Natural Gas, and US Dollar Technical Analysis: Price Patterns and Key Levels

WTI crude oil (CL) dropped on Tuesday and consolidated below key levels. However, it rebounded from the session low following the release of gasoline inventory data. The data showed a decline of 6.3 million barrels from the previous week. A decrease in gasoline inventories indicates increased demand or reduced supply, putting upward pressure on crude oil prices. As a result, WTI crude oil recovered above $73 after the report.

Additionally, ongoing geopolitical uncertainty contributes to heightened volatility in the oil market. This uncertainty was further intensified by expectations of a potential easing of the Middle East crisis. This was driven by US President Joe Biden’s discussion with Israeli Prime Minister Benjamin Netanyahu regarding potential resolutions for the ongoing conflict.

On the other hand, the ongoing volatility in the oil market also impacts natural gas (NG) prices. The prices are currently retreating from a resistance level. However, the end of the hurricane season in the United States in November could help stabilize natural gas prices. Moreover, the US dollar remains elevated and has broken key levels, advancing to a multi-week high. The US dollar is now awaiting the release of US inflation data on Thursday for further clues on its next move.

WTI Crude Oil (CL) Technical Analysis

Oil Daily Chart – Reversal from 200 SMA

WTI crude oil hit strong resistance at the 200 SMA on the daily chart and moved lower. Tuesday’s daily candle formed a strong bearish reversal. This bearish reversal signals a continuation of the short-term downtrend. The significant drop from the 200 SMA suggests the trend remains bearish. The black trendline further highlights this bearish trend.

The RSI is now approaching the midline, indicating potential short-term support. However, the sharp rally in September, followed by the decline in October, points to increased volatility in the oil market.

Oil 4-Hour Chart – Ascending Channel Pattern

WTI crude oil is exhibiting intense price volatility on the 4-hour chart. The price has declined from the trendline while remaining within the ascending channel. The recent drop in the oil market is attributed to overbought conditions. The RSI observes these overbought conditions on the 4-hour chart.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Decline Within Triangle Pattern

Natural gas prices have also declined due to strong resistance on the daily chart, defined by a triangle pattern. Despite this pullback, the overall trend remains bullish as the price trades above the 50 and 200 SMAs on the daily chart. The recent decline was triggered by overbought conditions, as indicated by the RSI.

Natural Gas 4-Hour Chart –Upward Trend

The 4-hour chart shows that natural gas prices began their decline from strong resistance. This resistance is marked by the red trend line. The price is now approaching the initial support level at $2.50. A break below this level could lead to the next support at $2.32.

US Dollar Technical Analysis

US Dollar Daily – Triangle Pattern

The US dollar broke above the triangle pattern by closing above 102.60. However, the price has moved back within the triangle and is attempting to push higher. Strong resistance for the US dollar index is at 103.75, marked by the 200 SMA. The overall trend remains bearish as long as the index remains below this level.

US Dollar 4-Hour Chart – Bull Flag Pattern

The US dollar remains in a strong uptrend following the breakout from the falling wedge pattern. After the NFP release, the US dollar surged higher. This strong rally was followed by consolidation, which formed a bull flag pattern. This pattern was broken on Wednesday, and the US dollar resumed its upward momentum. The price now targets the falling wedge pattern’s projected levels at 102.82 and 103.10.