Crude oil WTI capped at $65 resistance on positive US Dollar

• WTI crude oil formed a double top at $66.66 a barrel. 
• The longer-term fundamentals seem to remain in place for the black gold. 

Crude oil WTI is currently trading at around $64.70 virtually unchanged on Thursday so far as crude oil is mainly driven by sentiment entering the Easter break. The US Dollar being on the frontfoot is also weighing on WTI.  

Earlier this week Saudi Arabia and Russia announced that they were working a 10 to 20-year alliance in order to stabilize crude prices by cutting production; the news is seen as long-term bullish. Additionally, on Wednesday the EIA data showed a build in the oil stockpile which was seen as short-term bearish by the market.

Meanwhile, according to a Reuters poll, oil prices are likely to rise in 2018. The catalysts for higher prices should be supply disruptions and the Organization of the Petroleum Exporting Countries (OPEC) deal to cut production. The deal involves OPEC and non-OPEC nations to cut production in order to artificially increase the oil demand, and in turn, increasing oil prices in the process. 

Crude oil WTI daily chart

As it can be seen on the daily chart, a double top with the high made on January 25th  at $66.66 was established three days ago. The longer-term trend is still bullish and in the short-term, the bears managed to create a small pullback to $63.72. The question is whether there will be a second leg down in the pullback as it usually happens. If the second bear-leg down scenario unfolds, the pullback could lead to $62 previous demand zone and a test of the lower ascending bull trend line becomes possible. 

Crude oil WTI 1-hour chart

The WTI is finding resistance at the 200-period simple moving average of the 1-hour chart at the $64.88 level, the next resistance in sight is likely located at the $66 handle as it acted as strong resistance in the last few days. If the bear correction continues, scaling points to the downside are seen at $63.74 swing low; followed by $62.30 previous demand zone.