Crude Oil Price Update – $69.62 to $68.53 Retracement Zone Controlling Near-Term Direction

U.S. West Texas Intermediate crude oil futures took a dive late Friday, closing out the week with its worst performance since March as worries that travel restrictions to curb the spread of the COVID-19 Delta-variant will derail the global economic recovery.

Daily new COVID-19 infections in the United States have climbed to a six-month high and Japan and China are re-imposing restrictions to halt the spread of the virus, Reuters reported.

At 17:53 GMT, September WTI crude oil futures are trading $68.59, down $0.50 or -0.72%.

Also weighing on dollar-denominated crude oil was surge in the U.S. Dollar. The greenback rose sharply early Friday after monthly U.S. job growth came in higher than expected, raising the odds of a sooner than expected tightening by the Federal Reserve.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $67.61 will signal a resumption of the downtrend. A move through $74.23 will change the main trend to up.

The minor trend is also down. Taking out $67.61 will make $70.18 a new minor top.

The short-term range is $65.01 to $74.23. WTI crude oil is currently trading near the low end of its retracement zone at $69.62 to $68.53.

The main range is $76.07 to $65.01. Its retracement zone at $70.54 to $71.85 is resistance.

The major support zone is $66.35 to $64.05. This zone stopped the selling at $65.01 on July 20.

Daily Swing Chart Technical Forecast

The direction of the September WTI crude oil market into the close on Friday is likely to be determined by trader reaction to $68.53.

Bearish Scenario

A sustained move under $68.53 will indicate the presence of sellers. The first downside target is $67.61. Taking out this minor bottom could trigger an acceleration into $66.35.

Bullish Scenario

A sustained move over $68.53 will signal the presence of buyers. This could trigger a late session short-covering rally into $69.62, followed by $70.18.