Crude Oil Price Update – Chart Pattern Indicates $69.62 – $68.53 is New Value Area

U.S. West Texas Intermediate crude oil futures are edging lower early Monday, pressured by a mixed bag of fundamental news that is causing just enough uncertainty to encourage some light profit-taking following an eight day rally.

Ahead of today’s trade, the market was being supported by the notion that demand would outstrip supply as bullish traders increased bets that the current rate of vaccinations would outweigh any damage by the resurgent coronavirus.

The news over the weekend was mixed, but traders decided to react to a potentially bearish story on Chinese factory output and its potential impact on future crude oil demand.

At 07:29 GMT, September WTI crude oil futures are trading $73.33, down $0.62 or -0.84%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. The main trend will change to up on a trade through $74.90. A move through $65.01 will signal the resumption of the down trend.

The range is pretty wide which is why we believe there will be a pullback into a support zone before traders attempt another rally.

The minor range is up. This is controlling the momentum. A trade through $70.56 will change the minor trend to down. A move through $74.23 will indicate the buying is getting stronger.

The short-term range is $76.07 to $65.01. The market is currently trading on the strong side of its retracement zone at $71.85 to $70.54, making it support.

The minor range is $65.01 to $74.23. If the minor trend changes to down then look for the selling to possibly extend into its retracement zone at $69.62 to $68.53.

Daily Swing Chart Technical Forecast

It’s not a real promising chart pattern, but trader reaction to $74.23 and $72.93 is likely to determine the direction of the September WTI crude oil market on Monday.

Bullish Scenario

A sustained move over $74.23 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for a potential surge into the main top at $74.90. Taking out this top will change the main trend to up and could trigger an acceleration into the contract high at $74.90.

Bearish Scenario

A sustained move under $72.93 will signal the presence of sellers. This could trigger an acceleration into the short-term Fibonacci level at $71.85. Sellers took out this level earlier in the session, but couldn’t sustain the move. They could come back later during the regular U.S. session.