• Oil prices showed a bloodbath as fears of US recession soars ahead of Fed policy.
• The USD Index has extended its correction as Fed rate hikes were having a negative impact on the banking sector.
• Oil inventory data from the US EIA will remain in the spotlight.

West Texas Intermediate (WTI), futures on NYMEX, are seeking support around $71.50 in the Asian session after a bloodbath on Tuesday. The black gold was heavily dumped as investors got cautious that more interest rate hikes from the Federal Reserve (Fed) will deepen fears of a recession in the United States.

Also, a delay in US debt ceiling talks is accelerating anxiety among market participants as US President Joe Biden is not interested in meeting with US Senate McCarthy if Republicans want negotiation.

Meanwhile, the US Dollar Index (DXY) has extended its correction to near 101.86 as a member of the Council of US Economic Advisers, Heather Boushey, said that interest rate hikes from the Fed were having a negative impact on the banking sector, as reported by Reuters.

Going forward, oil inventory data from the US Energy Information Administration (EIA) will remain in the spotlight.

The oil price is declining toward its annual low plotted from March 20 low at $64.39 on a daily scale. The black gold witnessed immense selling pressure after failing to surpass the horizontal resistance placed from January 23 high at $82.68.

The 10-period Exponential Moving Average (EMA) at $75.20 is acting as a barricade for the oil price.

Also, the Relative Strength Index (RSI) (14) has slipped below 40.00. Further downside seems possible amid the absence of divergence and oversold signals.

Oil bears will further drag the asset towards 09 December 2022 low at $70.27 and March 24 low at $66.88 after dropping below May 02 low at $71.37.

Alternatively, a confident break above April 03 low at $79.00 will drive the oil price toward April 04 high at $81.80 and April 12 high at $83.40.

WTI daily chart