Oil, Natural Gas, and US Dollar Technical Analysis: Price Movements Amid Global Uncertainty

The geopolitical developments in Syria are expected to influence oil and natural gas markets significantly. The ousting of Assad’s regime raises fears of increased instability in the Middle East. While Syria is not a major oil producer, its strategic location and alliances with Russia and Iran amplify its importance. The region’s volatility could disrupt oil supply routes and elevate the geopolitical risk premium on crude prices.

Moreover, China’s economic policy shift could further affect energy demand. The Politburo’s commitment to expanding domestic consumption and implementing looser monetary policies may spark a commodity price boom. These measures would likely boost demand for WTI oil (CL). This differs from Saudi Aramco’s recent price cuts for Asian buyers, which show concerns about weak demand. A recovering Chinese economy could offset these bearish signals and support higher prices in the energy markets. The market waits for the US inflation data to be released on Wednesday, which will be the big news for the US dollar index (DXY). The potential interest rate cuts may also stimulate economic activity and fuel demand for oil.

Natural gas (NG) prices consolidate after producing the peak at $3.60. Stable supply and lower demand have caused prices to drop, but colder January weather could increase heating needs. Europe’s decision to raise gas storage requirements reflects heightened caution over winter supply risks. These shifts in the gas market could impact storage levels and prices as the season progresses. These geopolitical, economic, and market dynamics create a complex and uncertain outlook for oil and natural gas markets in the near term.

WTI Crude Oil (CL) Technical Analysis

Oil Daily Chart – Consolidation at the Apex of Triangle

The daily chart for WTI crude oil shows that the price is trading near the apex of a triangle pattern. The market has dropped from the $70 resistance level and found support at $67. The 50 SMA reinforces the $70 resistance, while the $67 support aligns with the triangle’s lower boundary. Consolidation within this range has created uncertainty in the oil market, and a breakout from this range will determine the next directional move.

Additionally, multiple triangles are forming in the oil market. A break above $79.90 would signal a shift toward a positive direction, while a break below $67 would likely continue the bearish momentum. The 50-day and 200-day SMAs indicate persistent bearish pressure in the oil market.

Oil 4-Hour Chart – Triangle Pattern

The 4-hour chart for the oil market shows a triangle pattern, with the price fluctuating near the apex between $70 and $67. A breakout from this range will determine the next direction for oil. The RSI is moving within a range, indicating that the market may remain sideways in the short term.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Cup and Handle

The daily chart for natural gas shows that the price has hit the resistance at $3.60 and corrected toward the support at $3. The price fluctuates within this range after reaching the support level. The emergence of a cup-and-handle pattern indicates a bullish foundation for natural gas. Consequently, the price will likely break above $3.60 to initiate the next upward move. Additionally, the 50-day SMA crossing above the 200-day SMA signals bullish momentum in the natural gas market.

Natural Gas 4-Hour Chart –Ascending Channel

The 4-hour chart for natural gas shows the price forming an ascending channel pattern. The price has been corrected lower from the channel’s resistance, and support was found at the midline of this pattern. The rebound from the midline suggests short-term consolidation. However, the price is likely to increase due to favorable price action.

US Dollar Technical Analysis

US Dollar Daily – Consolidation

The daily chart for the US dollar index shows that the index has dropped from the resistance at 107 to the support at 105.60. It rebounds from this support region and enters a consolidation phase. The appearance of a bullish hammer at the red trendline near the 105.60 support suggests a short-term upward direction. Additionally, the RSI rebounds from the mid-level, and the 50-day SMA crosses above the 200-day SMA, indicating positive momentum for the US dollar in the short term.

US Dollar 4-Hour Chart – Ascending Channel

The 4-hour chart for the US dollar index shows an ascending channel pattern formation, with the channel’s support aligning at 105.60. The index hit this support level and rebounds higher. The price correction from the 107 resistance has created a bearish setup, which will be triggered if the index breaks below 105.60. However, if the index recovers above the 108 area, the bearish setup will be invalidated, and the index will likely move higher.