Looks set to deliver biggest monthly close of 2023

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• Oil prices aim to deliver the biggest monthly close of the year as interest rates from global central banks will peak sooner.
• Overall demand for oil will remain upbeat in the US economy as fears of a recession fade.
• WTI prices delivered a breakout of the Descending Triangle chart pattern.

West Texas Intermediate (WTI), futures on NYMEX, corrects modestly after printing a fresh three-month high around $80.65. The oil price struggled to extend upside but a bullish bias has not faded yet as investors believe that interest rates by global central banks are near peak.

The Federal Reserve (Fed) shifts to incoming data for further policy action after raising interest rates on July 26. Also, fears of recession fade now, indicating that overall oil demand in the United States will remain upbeat.

For further guidance, investors await the Caixin Manufacturing PMI data for July, which will be published on Tuesday. As per the consensus, the economic data is seen declining marginally to 50.3 vs. the former release of 50.5.

WTI prices delivered a breakout of the Descending Triangle chart pattern formed on a daily scale. A breakout of the aforementioned chart pattern results in wider ticks and heavy volume. Upward-sloping 20-period Exponential Moving Average (EMA) at $76.00 indicates that the short-term trend is bullish.

The Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which indicates that the upside momentum is active.

For further upside, the oil price needs to break above the previous week’s high of $80.53 decisively, which will drive the asset toward January 3 high at $81.56 followed by April 12 high at $83.40.

In an alternate scenario, an explosive downside move below July 17 low at $73.80 would drag the asset toward June 21 high at $72.70 and the round-level support of $70.00.

WTI daily chart