U.S. West Texas Intermediate crude oil futures are trading higher on Thursday and is currently in a position to finish higher for the week. The market is being supported by speculative buying in reaction to fears of a supply disruption due to rising tension in the Middle East. Basically, risk of conflict exists due to concerns over perceived threats from Iran. Gains are likely being limited by rising U.S. inventories.
At 14:41 GMT, July WTI crude oil is trading $63.37, up $1.13 or +1.82%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of the closing price reversal top at $60.10 on May 6.
The trend will change to up on a move through $66.44, but buyers will have to claw through three retracement levels in order to get there. A move through $60.10 will signal a resumption of the downtrend.
The major retracement zone is $59.70 to $63.36. This zone is controlling the longer-term direction of the market. Buyers are trying to take out the upper or Fibonacci level at $63.36 today.
The short-term range is $60.10 to $63.48. Its pivot at $61.79 is new support.
Daily Technical Forecast
Based on the early price action and the current price at $63.37, the direction of the July WTI crude oil market the rest of the session is likely to be determined by trader reaction to the major Fibonacci level at $63.36.
Crossing to the strong side of the Fib level at $63.36 and sustaining the move will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to extend into the short-term Fibonacci level at $64.02. This is followed closely by a downtrending Gann angle at $64.32.
Sellers could come in on the first test of $64.02 to $64.32. However, overcoming $64.32 could trigger an acceleration to the upside with the next target angle coming in at $65.51.
A sustained move under $63.36 will signal the presence of sellers. If this creates enough downside momentum then look for a potential pullback into $62.99.
Other Things to Note
Both the short-term and long-term trends will be affected by trader reaction to $63.36.
This article was originally posted on FX Empire
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