WTI: despite strong DXY post dovish ECB, eyes a break of $53.00

• WTI comes with a technical bullish bias above 21-D SMA at 51.36
• Headed for a test of 27 Sep. highs?
• DXY higher and firm after dovish ECB "taper"

Currently, at $52.64bbls, WTI is higher and en-route to penetrate a key resistance that could give way to the 27th Sep. highs at $52.93bbls within October's recovery from below the $50 handle.

However, there is very little out there to support a continuation of the upside while the dollar remains underpinned as the market focuses on Central Bank divergences while the Fed leads the way in normalising monetary policy, underpinning the greenback's upside. 

DXY strong on ECB 'dovish taper', should keep lid on WTI bulls

ECB: Dovish taper - BBH

The DXY is firmly bid on the 94 handle, making fresh highs of 94.53 today, busting through resistances below the handle from a low of 93.47 after the ECB 'tapered' its QE but left the door wide open for increases of QE if and when required. Draghi doesn't wish to use the term "tapering" as he doesn't want to send the wrong message to markets and stresses that while the EZ economy is improving, "we are not there yet" in respect to their inflation target. 

Draghi Q&E: "is this called tapering?"

At the same time, the US stock market is off its post ECD announcement highs and despite the House of Representatives passing a budget blueprint today that is key to Republicans progress of tax reform while approving the measure even in a narrow 216-to-212 vote. 

Oil, by its own merit, is stuck in limbo on a fundamental basis, supported last week by the EIA data that showed that gasoline and distillate inventories dropped more than expected last week. However the Energy Information Administration yesterday reported an unexpected rise of about 900,000 barrels in crude stockpiles for the week ended Oct. 20, while at the same time, also revealing a 1.1 million-barrel rise in total domestic crude output. The major concern, on a wider picture, is how much growth there might be in US crude production despite the OPEC and non-OPEC nation's efforts to curb global production and buoy prices. 

WTI levels

$53.56 (Apr 11th high), $ 54 (psychological level). to the downside, 51.94 (10-DMA), 51.50 (psychological level), 51.23 (20-DMA). Daily (14) RSI 61 (neutral/ bullish bias).