Intermarket: Oil rescued on Wall Street; DXY to sell off in June and support commodities?

Crude Oil has been a volatile commodity, recovering from the lows of $47.73bbls WTI in yesterday's trade having dropped from supply through $50.00bbls and highs of $50.18bbls on the 25th May and $50.06bbls on the 30th May.

The bullish channel is well defined from the 10th of Feb recovery and offers have been bought into on the 14th March at $35.94 (at the 20 dma), 17th april at $37.61, 9th May at $43.00 (at the 20 dma) and again on the 18th May at $46.72 and 31st May at $47.73. While the price of oil has been making an 80% recovery since 2016 lows, the performances on Wall Street have correlated closely in a demand driven and risk-on environment.

The previous highs in the year in the S&P 500 CFD's were on the 19th 2102.50 and 20th April at 2111.37 when oil had a subsequent two-day dip from $44.49 down to $42.50. As Wall Street picked up again from circa 2087, so did Oil and we have seen this relationship play out ever since with stock leading the way. While there are fundamentals at play in the oil market capping the progress, Wall Street remains bullish and the S&P 500 rallied to 2105.93 overnight, eventually supporting oil off the intra-day lows of $47.98 and back to$49.35 the high. 

Meanwhile, DXY might be subject to a bought of further supply as an under performer overnight with yields moving down. June is seasonally bearish for the USD on profit taking as well. Watching 93 in DXY for a potential bid in oil to $63.00bbls. However, with the Fed around the corner, fundamentals in a rate hike could see a bid in the dollar, an initial sell-off on Wall Street and longer term yields potentially counter supportive. On the flip side, should the Fed not hike nor offer July as a likely scenario, Wall Street and the commodity sector could rally.