Crude Oil Price Update – Buyers Rejected at Retracement Zone Again

September West Texas Intermediate crude oil futures settled lower on Monday as investors expressed concerns over increased output from OPEC which appeared to reach its high for the year in July. Furthermore, both U.S. WTI futures and international-benchmark Brent crude oil futures posted their biggest monthly decline since July 2016.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but the price action indicates momentum may be getting ready to shift to the downside as buyers were once again rejected at a key retracement zone.

Taking out $70.43 will signal a resumption of the uptrend. A trade through $67.56 will change the main trend to down.

The minor trend is also up. A trade through $68.26 will change the minor trend to down. This will also shift momentum to the downside.

The main range is $72.98 to $66.29. Its retracement zone at $69.64 to $70.42 is resistance. This zone has been providing actual resistance for 5 straight sessions, having stopped the rally at $70.43 on Monday.

The short-term range is $67.56 to $70.43. The market closed below its pivot at $69.00, suggesting a downside bias is developing.

Another main range comes in at $67.99 to $66.81. This is the next downside target. It is currently support.

Daily Swing Chart Technical Forecast

Based on the close at $68.74, the direction of the September WTI crude oil market early Wednesday is likely to be determined by trader reaction to the short-term pivot at $69.00.

A sustained move under $69.00 will indicate the presence of sellers. If this move gathers enough downside momentum then look for the market to test $68.26 then $67.99.

Taking out $67.99 will indicate the selling is getting stronger. This could lead to a test of $67.56 and a change in trend if this bottom is broken.

A sustained move over $69.00 will signal the presence of buyers. If this creates enough upside momentum then look for a retest of the retracement zone at $69.64. If sellers return then this should be the final retest of this area before the trend changes to down. However, taking out $70.43 could launch an acceleration to the upside.