West Texas Intermediate (WTI), futures on NYMEX, have shown some correction after failing to sustain above $81.00 in the Asian session. The oil price had a stellar gap-up opening above $81.00, 7% higher from Friday’s closing inspired by the announcement of further production cuts by OPEC this weekend.

According to Reuters, the oil cartel will cut the overall oil production by around 1.16 million barrels/day (bpd), which will lead to the overall pledge of production cut to 3.66 million bpd.

Meanwhile, the US Dollar index (DXY) has printed a fresh weekly high at 102.95 as higher oil prices are expected to fuel up global inflationary pressures. This might force the Federal Reserve (Fed) to continue its policy-tightening spell further.

On the daily scale, the oil price has sensed some long-liquidations after a solid gap-up move post facing barriers near the horizontal resistance plotted from March 07 high around $81.00. Upward-sloping 10-period Exponential Moving Average (EMA) at $74.20 indicates that the upside momentum is extremely solid.

The Relative Strength Index (RSI) (14) has climbed above 60.00 for the first time in the past three months, showing no signs of divergence and any evidence of an overbought situation.

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 toward March 23 high at $71.69. A break below the latter would further drag the oil price toward March 27 low at $69.18.