WTI Crude Oil Futures (CL) Technical Analysis for Week-ending June 3

The July Crude Oil futures market is closed Monday because of the U.S. Memorial Day bank holiday so we’ll take a look at the weekly chart which should offer you guidance all week especially when combined with the daily chart analysis.

The main trend is up according to the weekly swing chart. A trade through $52.25 will signal a resumption of the uptrend. The main trend will turn down on a trade though $37.50. The market is not in danger of turn the main trend to down, but it is in the window of time for a potentially bearish closing price reversal top.

It is also up eight weeks from the previous main bottom. This move will balance with a previous swing top at $43.69, formed the week-ending March 18. So we have to watch for topping signals.

The main range is $64.00 to $31.61. Its retracement zone is $47.81 to $51.63. The market is currently trading inside this zone. Once again, start watching for signs of a top because long investors like to take profits inside retracement zones and aggressive, counter-trend sellers like to initiate new short positions.

The short-term range is $37.50 to $51.22. Its retracement zone at $43.53 to $42.11 is the primary downside target.

Based on Friday’s close at $49.33, the direction of the market this week will be determined by whether buyers can take out the cluster of resistance points at $50.61, $51.25 and $51.63. Crossing to the strong side of the Fibonacci level at $51.63 will put the market in a bullish position.

The inability to overcome the resistance will indicate the presence of sellers. Breaking through the main 50% level at $47.81 will indicate the selling is getting stronger. This could trigger an acceleration to the downside with the next target a steep uptrending angle at $45.50. This is followed by the retracement zone at $43.53 to $42.11.

To simply matters, look for the start of another leg up on a sustained move over the Fib level at $51.63. Watch for the start of a sell-off if the 50% level at $47.81 fails as support. Holding between these levels will produce a choppy, two-sided trade.

OPEC meets on June 2^nd so we could see a reaction to the news on this date. Be prepared for volatility.