• The oil price has stretched its recovery above $81.70 as the Fed is expected to adopt a neutral stance ahead.
• Accelerating fears of a recession in the US have stemmed the need of pausing the rate-hiking spell sooner.
• The oil price is expected to remain volatile ahead of the release of the weekly inventory data by the US EIA.

West Texas Intermediate (WTI), futures on NYMEX, have stretched their recovery to near $81.00 in the Asian session. The oil price is expected to recapture a two-month high of $81.74 as the cooling United States economy due to contracting manufacturing activities and a slowdown in job openings have triggered the requirement of an early pause in the policy-tightening spell by the Federal Reserve (Fed).

The upside move in the oil price is also backed by the weak US Dollar Index (DXY), which has refreshed its monthly low below 101.50. Accelerating fears of a recession in the United States have stemmed the need of pausing the rate-hiking spell sooner. Investors would get more clarity after the release of the US Employment data.

Also, the oil price is expected to remain volatile ahead of the release of the weekly inventory data by the US Energy Information Administration (EIA) for the week ending March 31. On Tuesday, the US American Petroleum Institute (API) reported a decline in oil inventories by 4.3 million barrels.

On a daily scale, the oil price is marching towards the horizontal resistance plotted from December 01 high at $83.30 after a V-shape recovery. The V-shape recovery indicates the presence of strong buyers at lower levels, which considered the asset a value buy at those levels.

The asset is highly skewed from the 10-period Exponential Moving Average (EMA) at $76.38, which indicates a solid upside momentum.

Also, the Relative Strength Index (RSI) (14) has climbed into the bullish range of 60.00-80.00 for the first time in the past nine months, indicating signs of a bullish reversal.

Should the oil price break above April 03 high near $81.60, bulls will drive the asset towards December 01 high at $83.30 followed by October 21 high at $85.66.

On the flip side, a downside move below March 31 low at $73.31 would drag the asset towards March 23 high at $71.69. A break below the latter would further drag the oil price toward March 27 low at $69.18.

WTI daily chart