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Crude Oil Price Update – Potentially Bearish Secondary Lower Top Formed Ahead of API Report

·2 min read

U.S. West Texas Intermediate crude oil futures are edging lower late in the session on Tuesday as traders await the release of the latest weekly inventories data from the American Petroleum Institute (API) at 20:30 GMT.

Helping to cap prices are new risks to demand recovery in Europe after Germany and France halted COVID-19 vaccinations.

At 18:07 GMT, May WTI crude oil is trading $64.72, down $0.72 or -1.10%.

The API, an industry group, will report crude stock pile levels later on Tuesday, followed by official numbers from the Department of Energy on Wednesday, with analysts expecting another week of gains.

Crude inventories increased by 12.8 million barrels in the week to March 5, against analysts’ expectations for a rise of less than 1 million barrels.

Daily May WTI Crude Oil
Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum shifted to the downside on March 8. A new secondary lower top was also formed on Tuesday, suggesting the selling pressure is getting stronger.

The main trend will change to down on a trade through $63.10. A move through $66.44 will signal a resumption of the uptrend, while a trade through $67.79 reaffirms the bullish chart pattern.

The first minor range is $67.79 to $63.10. Its retracement zone at $65.45 to $66.00 is resistance.

The second minor range is $59.08 to $67.79. Its retracement zone at $63.44 to $62.41 is the next downside target. This area stopped the selling last week at $63.10. Look for an acceleration to the downside if this zone fails as support.

Daily Swing Chart Technical Forecast

The market is balanced shortly before the release of the API report at 20:30 GMT. This report should determine the late session momentum.

If the momentum is to the upside then look for a move into $65.45 to $66.00. The trigger point for an acceleration to the upside is $66.44.

If the momentum begins to accelerate to the downside then look for a test of $63.44 to $62.41. Taking out $62.41 could trigger an acceleration to the downside with $59.08 the next potential downside target.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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