U.S. West Texas Intermediate crude oil prices are trading higher, boosted by a weaker U.S. Dollar and stronger-than-expected demand for higher risk assets. The market is also being supported by improving economic data although gains could be limited by sharp spikes in the number of COVID-19 cases that could force some countries to reimpose strict restrictions and lockdowns. This could have an impact on demand for fuel.
At 12:14 GMT, August WTI crude oil is trading $39.06, up $0.57 or +1.48%.
Crude oil found some support as profits at China’s industrial firms rose for the first time in six months in May, suggesting the country’s economic recovery is gaining tractions. A recovery of economic sentiment in the Euro Zone also intensified in June after a modest pick-up in May.
Daily Technical Analysis
The main trend is up according to the daily swing chart, however, momentum is trending lower. The main trend changes to down on a trade thorough $34.66, while a move through $41.63 will signal a resumption of the uptrend.
The minor trend is down. This is controlling the downside momentum. A trade through $37.08 will indicate the selling is getting stronger. The minor trend changes to up on a move through $39.35.
On the downside, support is a series of 50% levels at $38.15, $37.50 and $36.63.
The minor range is $41.63 to $37.08. Its 50% level or pivot at $39.36 is potential resistance, but also a trigger point for an acceleration to the upside.
Daily Technical Forecast
If the upside momentum continues then look for buyers to make a run at the resistance cluster at $39.35 to $39.36. This is followed by a downtrending Gann angle at $39.63. Watch for a technical bounce on the first test of this downtrending Gann angle. This angle is also a trigger point for an acceleration to the upside with the first target another Gann angle at $40.63.
A failure at $39.35 to $39.63 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into 50% levels at $38.15 and $37.50, followed by an uptrending Gann angle at $37.13.
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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