Crude Oil Price Update – Close Under $69.92 Forms Potentially Bearish Weekly Closing Price Reversal TopThe direction of the September WTI crude oil market on Friday is likely to be determined by trader reaction to the pivot at $70.02.
U.S. West Texas Intermediate crude oil futures are edging lower early Friday as prices continue to be capped by a stronger U.S. Dollar that is limiting foreign demand for the dollar-denominated asset. The greenback is being supported by the prospect of higher interest rates in the United States. Crude is set to finish the week slightly lower after testing a multi-year high earlier in the week.
At 05:19 GMT, September WTI crude oil is trading $69.43, down $0.60 or -0.86%.
Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
The prospect of rate hikes also weighed on the longer-term growth outlook, which would eventually hurt oil demand.
Oil prices also fell after the U.K. on Thursday reported its biggest daily rise in new cases of COVID-19 since February 19, with government figures showing 11,007 new infections versus 9,055 a day earlier.
Finally, the news that negotiations between the U.S. and Iran were going smoothly may have also encouraged some long investors to lighten up their positions.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through $71.99 will signal a resumption of the uptrend. A move through $61.06 will change the main trend to down.
The minor trend is also up. A trade through $68.05 will change the minor trend to down. This will shift momentum to the downside. Taking out the minor bottom at $67.84 will confirm the shift in momentum.
The minor range is $68.05 to $71.99. Its 50% level at $70.02 is resistance. Additional resistance is the 50% level at $69.92.
A third minor range is $64.60 to $71.99. Its 50% level at $68.29 is the nearest support.
The short-term range is $61.06 to $71.99. If the minor trend changes to down then look for the selling pressure to possibly extend into its retracement zone at $66.53 to $65.24.
Daily Swing Chart Technical Forecast
The direction of the September WTI crude oil market on Friday is likely to be determined by trader reaction to the pivot at $70.02.
A sustained move under $70.02 will indicate the presence of sellers. Taking out yesterday’s low at $68.86 will indicate the selling is getting stronger with the next downside targets clustered at $68.29, $68.05 and $67.84. The latter is a potential trigger point for an acceleration to the downside with $66.53 to $65.24 the next major target area.
A sustained move over $70.02 will signal the presence of buyers. This could trigger a quick rally into $70.43. Look for sellers on the first test of this level. They are going to try to form a secondary lower bottom.
Taking out $70.43 will indicate the buying is getting stronger with $71.99 the next target.
Some traders may want to use last week’s close at $69.92 as a pivot. Settling under this level will form a weekly closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 week correction.