I define WTI as a USD currency pair but operates under a different name because WTI and the interest rate curve responsible for WTI’s price and movements shares a perfect 100% correlation to its interest rates. For WTI not to correlate 100% means its price is wrong and mislocated therefore forecast abilities becomes an abnormal game of chance. The same scenario holds true for all market instruments to include currency prices.
Bond and interest-rate markets were closed Friday and CPI as well as Retail Sales both reported lower prices. The side bar to CPI is it was written and forecasted to report lower for April because 0.6 CPI for March was far to high by at least 20 to 40 basis points. A check on Friday’s “investors”, WTI ranged 0.57 from 53.40 to 52.83 and closed at 53.18. As Bond and interest rate markets open again Monday, WTI must properly reprice from Thursday closes to a lower CPI and Retail Sales therefore volatility has potential. Yet 53.18 holds for 24 hour trades.
The bottom side vital break point is located at 53.01 in order to target the bottom level at 52.91. Next after 52.91 is a range point at 52.64. Range points always hold more credence to a trade able level therefore 52.64 is expected to hold. Below 52.64 in days ahead, next point is 51.58. The strategy is long the bottom and free long trade below 52.91. The target from 52.91 is 52.99 and 52.91 from 52.64.
The topside must break is located at 53.27 to target 53.46. The target achieves its destination by 53.19, 53.22 and 53.23, 53.27, 53.32, 53.38, 53.42 and target 53.46.
Longer term, USD interest rates are low therefore WTI requires a yield advantage and positive news to travel higher. The next targets above in days ahead are 53.71, 54.10 and 54.57.