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Crude Oil Price Update – Close Under $63.05 Forms Closing Price Reversal Top

James Hyerczyk

U.S. West Texas Intermediate crude oil futures are trading slightly higher late in the session on Monday after giving up nearly all of its 2% gains from earlier in the session. Despite ongoing fears of Iran’s retaliation against U.S. interests, traders aren’t likely to take the market much higher from current levels until they actually see damage to supply. This could come in the form of an attack on an oil tanker or Saudi infrastructure like in September.

At 19:42 GMT, February WTI crude oil is trading $63.21, up $0.16 or +0.24%.

Daily February WTI Crude Oil

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out Friday’s high. A trade through $60.63 will change the main trend to down.

Monday’s rally stalled at $64.72. At first the buying stopped then enough sellers came in to drive the market back under the April 22 main top at $63.87.

A close under Friday’s close at $63.05 will form a closing price reversal top. This could trigger the start of a 2 to 3 day sell-off. If it’s strong enough to take out $60.63 then the main trend will change to down.

The major range is $72.22 to $45.60. Its retracement zone at $62.05 to $58.91 is controlling the longer-term direction of the market. Consider it a support zone.

Daily Technical Forecast

Based on Monday’s price action, the direction of the February WTI crude oil market into the close is likely to be determined by trader reaction to Friday’s close at $63.05.

Bullish Scenario

A sustained move over $63.05 will indicate the presence of buyers. If this generates enough upside momentum into the close the look for a possible retest of today’s intraday high at $64.72.

Bearish Scenario

A sustained move under $63.05 will signal the presence of sellers. This could trigger a pullback into a potential support cluster at $62.40 to $62.25, followed closely by the major Fibonacci level at $62.05.

This is a potential trigger point for an acceleration into the main bottom at $60.63. Taking out this bottom will change the main trend to down.

This article was originally posted on FX Empire

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