Oil, Natural Gas, and US Dollar Technical Analysis: Bearish Pressures and Breakout Scenarios

The US Dollar Index (DXY) is currently supported by speculation about Federal Reserve policy moves. Moreover, President-elect Donald Trump’s comments about imposing tariffs have heightened concerns regarding slower Federal Reserve rate cuts, thereby boosting the dollar. Consequently, a stronger dollar weighs on crude oil prices, increasing costs for buyers using foreign currencies. According to the CME FedWatch Tool, the market predicts a 74.5% chance of a December rate cut. As a result, traders will carefully monitor economic data and geopolitical developments to better assess the dollar’s future direction.

Meanwhile, WTI crude oil (CL) consolidates around $68.25, facing bearish pressure due to the robust US dollar. However, despite this downward trend, encouraging economic data from China supports oil prices. Specifically, China’s Caixin Manufacturing PMI increased to 51.5 in November, signalling strong demand and export growth. On the other hand, geopolitical risks in the Middle East further complicate the market outlook, as concerns over potential supply disruptions could push prices higher. Additionally, traders focus on the upcoming OPEC+ meeting, where discussions on the 2025 output policy are expected to influence market dynamics. Notably, any delays in decision-making could prolong market uncertainty, thereby limiting significant price movement in the short term. Similarly, natural gas (NG) prices rose higher in November and fluctuated at the resistance level.

WTI Crude Oil (CL) Technical Analysis

Oil Daily Chart – Bearish Pressure at the Apex of Triangle

The daily chart for WTI crude oil indicates that the price has been consolidating within a complex triangle pattern over the past three quarters. This consolidation has brought the price to the apex of the triangle. A breakout from this apex will determine the next direction for the oil market. The 50-day SMA remains below the 200-day SMA, and the RSI is below the midline, signalling bearish pressure. A break below the $66–$65 level could push the oil market in a new direction.

Oil 4-Hour Chart – Triangle Pattern

The 4-hour chart also shows a triangle pattern formation, consolidating the price between $71 and $67. The RSI has been fluctuating below the midline, indicating bearish pressure. A break below $66 could negatively impact the oil market.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Cup and Handle

The daily chart indicates that natural gas has formed a cup-and-handle pattern over the past year. The price has broken the neckline of this pattern around $3 and is poised for a potential upward move. After breaking out the cup-and-handle pattern, the price encountered resistance at $3.60 and corrected lower. Strong support for natural gas remains at $3, where the next upward move could begin.

Natural Gas 4-Hour Chart –Ascending Channel

The 4-hour chart for natural gas shows that the price has been trading within an ascending channel over the past three months. The price recently reached the daily resistance level of $3.60, further confirmed by the resistance line of the ascending channel on the 4-hour chart. The midline of this channel is around $3, while the lower channel support lies near the $2.60 price zone.

US Dollar Technical Analysis

US Dollar Daily – Support at 105.60

The daily chart for the US dollar index shows resistance at 107 and corrected lower toward the strong support level at 105.60. A strong rebound occurred when the index reached the 105.60 support level. This rebound has moved the US dollar index into a neutral zone between 107 and 105.60. The 50-day SMA is crossing above the 200-day SMA, and the RSI has found support at the midline, indicating a positive trend.

US Dollar 4-Hour Chart – Ascending Channel

The 4-hour chart for the US dollar index shows that it trades within an ascending channel and has rebounded from 105.60, which aligns with the channel’s support. This rebound has taken the index to resistance near the red trendline around the 106.50 zone. A break below 105.60 could push the US dollar index toward the 103.40 zone.