Oil, Natural Gas, and US Dollar Technical Outlook: US-China Talks Shift Market Sentiment

Overview: Crude oil, natural gas, and the US Dollar are showing notable technical reactions to renewed optimism surrounding US-China trade negotiations. As diplomatic efforts resume, markets are responding with mixed signals across commodities and currency charts.

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WTI Crude Oil (CL) Technical Analysis

Short-Term Recovery, But Bearish Risks Linger WTI crude oil prices remain subdued under the key resistance zone at $66. Despite a modest bounce above $60, bearish momentum dominates the longer-term outlook. The breakdown below the $66 level—previously a critical support—has solidified bearish control, increasing the risk of a move toward the $50 level.

• Daily Chart Highlights:
  • 50-day SMA trending below the 200-day SMA.
  • Price action remains trapped below $66 resistance.
  • Bearish continuation patterns are forming, supporting a downside bias.
• 4-Hour Chart Outlook:
  • Descending broadening wedge pattern in play.
  • Consolidation under $60 signals lack of bullish conviction.
  • A break above $71 is essential to shift momentum toward the upside.

Fundamental Context: Optimism around US-China trade talks is providing short-term support, but rising OPEC+ output—led by a planned 960,000 bpd increase—threatens to cap gains. Kazakhstan’s pushback on production caps adds further pressure.

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Natural Gas (NG) Technical Analysis

Bulls Defend $3 Level, Eyeing Breakout Natural gas shows resilience with strong demand defending the psychological $3.00 support zone. The bounce comes as technical indicators point to an end of oversold conditions, with price action challenging resistance near the 50-day SMA.

• Daily Chart Highlights:
  • 200-day SMA provides firm support near $3.00.
  • Break above the 50-day SMA will open the door toward higher levels.
  • Uptrend confirmation pending a close above $4.00.
• 4-Hour Chart Outlook:
  • Constructive rebound from oversold RSI levels.
  • Immediate resistance seen at $4.00.
  • Bullish sentiment likely to continue if $3.00 remains intact.

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US Dollar Index (DXY) Technical Analysis

Bearish Momentum Dominates Amid Weak Structure The US Dollar Index remains under pressure, consolidating near multi-week lows. The failure to break above 100.65 confirms bearish control, with downside risks mounting amid a weak technical structure.

• Daily Chart Highlights:
  • Head-and-shoulders pattern signals longer-term reversal.
  • 50-day SMA trending below 200-day SMA confirms bearish momentum.
  • Support retest near 98 could open downside to 96.
• 4-Hour Chart Outlook:
  • Inverted head-and-shoulders failed to trigger breakout.
  • Index remains inside descending channel.
  • Reclaiming 100.65 and 102.75 required to invalidate bearish setup.

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Conclusion: Oil and natural gas show diverging trends, with WTI crude facing resistance due to oversupply, while natural gas finds firm bullish support at $3. Meanwhile, the US Dollar continues to exhibit weakness amid geopolitical and monetary policy uncertainty. With US-China trade talks looming and Fed policy in focus, markets remain highly sensitive to headline-driven shifts.

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