Crude Oil Price Update – Close Under $69.62 Forms Potentially Bearish Closing Price Reversal Top

U.S. West Texas Intermediate crude oil futures are trading lower on Monday, putting the market in a position to form a potentially bearish closing price reversal top, which could trigger the start of a minimum 2 to 3 day correction.

The catalysts behind the selling pressure are the prospect of higher Iranian exports and psychological resistance at $70.00.

At 09:55 GMT, July WTI crude oil is trading $69.19, down $0.43 or -0.62%. This is down from an intraday high of $70.00.

Helping to dampen concerns over renewed negotiations between the U.S. and Iran that could lead to increased supply are increased demand expectations due to the reopening of U.S. and European economies.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high of $70.00 will signal a resumption of the uptrend.

A trade through $61.56 will change the main trend to down. This is highly unlikely, however, due to the prolonged move up in terms of price and time, the market is ripe for a closing price reversal top. If confirmed, this would change the main trend to down, but it will shift momentum for at least 2 to 3 days.

The minor trend is also up. A trade through $65.25 will change the minor trend to down. This will also indicate a shift in momentum.

The minor range is $65.25 to $70.00. Its retracement zone at $67.63 to $67.06 is the first downside target.

The main range is $61.56 to $70.00. Its retracement zone at $65.78 to $64.78 is the second downside target.

Daily Swing Chart Technical Forecast

The direction of the July WTI crude oil market on Monday is likely to be determined by trader reaction to $69.62.

Bullish Scenario

A sustained move over $69.62 will indicate the presence of buyers. Taking out $70.00 will indicate the buying is getting stronger with $72.00 the next potential upside target.

Bearish Scenario

A sustained move under $69.62 will signal the presence of sellers. If this move creates enough downside momentum then look for a near-term move into the minor retracement zone at $67.63 to $67.06. Since the main trend is down, look for buyers on a test of this area.

Side Notes

A close under $69.62 will form a closing price reversal top. If confirmed, look for the selling to possibly extend into $67.63 to $67.06 over the short-term.