Crude Oil Price Update – Big Decision for Investors as Market Tests Retracement Zone at $69.64 to $70.42

U.S. crude oil prices are trading lower early Tuesday after reaching a two-week high on Monday. Sellers came in early in the session after a report showed that OPEC production reached a 2018 high in the month of July.

At 0408 GMT, September West Texas Intermediate crude oil is trading $69.77, down $0.36 or -0.51%.

According to Reuters, OPEC increased output by 70,000 barrels per day in July. That marks a slowdown in production growth in June, when the 15-member cartel hiked production by 173,000 bpd.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Monday when buyers took out last week’s high at $62.92. The main trend will change to down when sellers take out $67.56.

The minor trend is also up. A trade through $68.26 will change the minor trend to down. The next upside target is the minor top at $70.60.

The main range is $72.98 to $66.29. The market is currently testing its retracement zone at $69.64 to $70.42. This zone is controlling the longer-term direction of the market.

The short-term range is $67.56 to $70.43. Its 50% level or pivot at $69.00 is support.

The major support zone is $67.99 to $66.81.

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Daily Swing Chart Technical Forecast

Based on the early trade, the direction of the September WTI crude oil futures contract on Tuesday is likely to be determined by trader reaction to the 50% level at $69.64.

A sustained move over $69.64 will indicate the presence of buyers. If this can generate enough upside momentum then look for a retest of the Fib level at $70.42 and yesterday’s high at $70.43.

Crossing to the strong side of $70.42 will mean the buying is increasing. Look for an acceleration to the upside if buyers can take out the minor top at $70.60 will increasing volume. The daily chart shows there is no resistance until $72.98 over the minor top.

A sustained move under $69.64 will signal the presence of sellers. This could lead to a fast break into the next 50% level at $69.00.

The daily chart starts to open up under $69.00 with the next potential downside targets coming in at $68.26 to $67.99.

Basically, the direction of crude oil this week will be determined by trader reaction to the 50% to 61.8% retracement zone at $69.64 to $70.42.