Crude Oil Price Update – Breakout Over $66.85 Could Fuel Short-Term Rally Into $68.41

August West Texas Intermediate crude oil is trading higher shortly before the regular session opening. The market is getting some help from demand for commodities, helped by a weaker U.S. Dollar. There may also be some residual buying tied to yesterday’s bullish EIA inventories report and strong refinery demand. However, gains could be limited by concerns over rising U.S. production and worries ahead of next week’s OPEC meeting in Vienna on June 22.

We could also be looking at position-squaring and short-covering with investors attempting to claw back at least 50% of the sell-off from $72.70 to $64.15.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is being driven higher by short-covering and a little aggressive counter-trend buying.

The minor trend is up. This is giving momentum its upside bias. A trade through $65.44 will change the minor trend to down and shift momentum to the downside.

The major support is a 50% level at $64.67.

The minor range is $68.52 to $64.15. Its retracement zone at $66.34 to $66.85 is currently being tested. This zone is likely to act like a pivot area.

The main range is $72.70 to $64.15. If the market accelerates to the upside through $66.85 then look for a possible surge into its retracement zone at $68.41 to $69.42.

Daily Swing Chart Technical Forecast

Based on the current price at $66.85, the direction of the crude oil market the rest of the session is likely to be determined by trader reaction to the Fib level at $66.85 and the 50% level at $66.34.

A sustained move over $66.85 will indicate the presence of buyers. The daily chart indicates there is plenty of room to the upside over this level with potential targets coming in at $68.41 and $68.52.

The inability to overcome $66.85 will indicate the presence of sellers. This could drive the market into $66.34. Taking out this level will indicate the selling is getting stronger. The daily chart is also wide open under this level with potential targets at $65.44 and $64.79.