Based on the earlier price action and the current price at $57.27, the direction of the December WTI crude oil futures contract the rest of the session is likely to be determined by trader reaction to the price cluster at $56.82 to $56.64.
U.S. West Texas Intermediate crude oil futures are edging higher on Tuesday, boosted by the hope of a trade deal between the United States and China that could help dampen the threat of a slowdown in global demand growth. Gains are likely being limited by general uncertainty ahead of today’s American Petroleum Institute (API) weekly inventories report.
At 17:24 GMT, December WTI crude oil futures are trading $57.27, up $0.73 or +1.29%.
The API report, due to be released at 21:30 GMT, is expected to show an 800,000-barrel inventory build. However, refined products such as gasoline and distillates could show a draw down.
The main trend is up according to the daily swing chart. The next upside target is the September 23 main top at $59.11. A trade through $53.71 will change the main trend to down.
The main range is $62.74 to $50.89. Its retracement zone at $56.82 to $58.21 is currently being tested. Trader reaction to this zone could determine the near-term direction of the market.
The intermediate range is $59.11 to 50.89. Its retracement zone at $55.97 to $55.00 is potential support.
Based on the earlier price action and the current price at $57.27, the direction of the December WTI crude oil futures contract the rest of the session is likely to be determined by trader reaction to the price cluster at $56.82 to $56.64.
A sustained move over $56.82 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the resistance cluster at $58.21 to $58.24. Sellers could come in on the first test of this area, however, taking it out could trigger an acceleration to the upside with $59.11 the next major upside target.
A sustained move under $56.64 will signal the presence of sellers. This could trigger a steep break into the intermediate Fibonacci level at $55.97, followed by the steep uptrending Gann angle at $55.21.
James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.