• WTI clears daily gains after peaking at a daily high of $76.83 near the 200-day SMA.
• EIA reported that US Crude Oil stocks decreased more than expected.
• Weak Housing data from the US support a less aggressive Fed.

On Wednesday, the West Texas Intermediate (WTI) price saw volatility and retreated to below $76.00 after peaking at $76.83. Oil prices had initially gained traction following weak Housing data from the US which strengthens the case of a less aggressive Federal Reserve (Fed) but the bulls failed to maintain their momentum.

Soft Housing Starts and Permits support a more dovish Fed

The US Census Bureau, part of the Department of Commerce, issued June soft Housing market data. Building Permits increased by 1.44 million, although it fell short of the predicted 1.49 million and was lower than the previous 1.496 million. Similarly, Housing Starts grew by 1.434 million but fell short of the 1.48 million predicted, slowing from the previous month's total of 1.559 million.

As mortgage rates rise when the Fed applies its contractive monetary policy, weak Housing data support the expectations that the Federal Open Market Committee (FOMC) won’t deliver a hike past July. In that sense, as higher rates cool down the economy and hence lowers Oil demand, the WTI gained traction.

Regarding US Oil inventories, the American Petroleum Institute (API) Crude Oil stocks decreased in the week ending on July 14. US Energy Information Administration (EIA) reported that the Crude Oil Stocks also decreased by  708,000 barrels and both figures show bigger declines than expectations.

WTI levels to watch

The daily chart suggests that the technical outlook for the short term of the WTI is neutral to bearish. The Relative Strength Index (RSI) stands flat in positive territory, while the Moving Average Convergence Divergence (MACD) prints decreasing green bars indicating that the bulls are struggling to gain momentum. 

Support levels: $75.20, $74.00, $73.53(100-day SMA).
Resistance levels: $76.98 (200-day SMA), $78.00,$80.00.

WTI Daily chart