U.S. West Texas Intermediate crude oil price rose sharply on Friday on the back of OPEC’s decision to bring forward to Saturday discussions on whether to extend record production cuts and a surprise decline in the May U.S. unemployment rate. Traders seemed to shrug off worries from earlier in the week about rising U.S. gasoline and distillate inventories.
At 17:33 GMT, July WTI crude oil is at $39.40, up $1.99 or +5.32%.
The fundamentals are bullish ahead of the OPEC+ meeting with speculators betting OPEC and its friends would take care of reducing oil supply and a fast recovery in the U.S. economy reducing concerns over demand growth.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The next major swing chart target is the March 3 main top at $48.96. A trade through $31.14 will change the main trend to down.
The main range is $54.86 to $17.27. Its retracement zone at $36.07 to $40.50 is controlling the longer-term direction of the market. July WTI crude oil is currently trading inside this retracement zone, making $36.07 potential support and $40.50 potential resistance.
July WTI crude oil is looking good ahead of the week-end, but it still faces some headwinds before we’re likely to see a strong breakout to the upside.
The upside momentum is strong as the market enters a price gap from March at $37.64 to $41.88. Inside this price gap in the main Fibonacci level at $40.50. Sellers inside this price gap are capable of slowing down the upside momentum. Overcoming the top of the gap at $41.88 could trigger the next upside breakout.
On the downside, the nearest support is the main 50% level at $36.07. The upside momentum, but not the main trend will weaken if $36.07 fails as support.
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This article was originally posted on FX Empire
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