James Hyerczyk
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WTI Crude Oil

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%.

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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 September WTI Crude Oil

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.

Bearish Scenario

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.

Bullish Scenario

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.

Side Notes

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.

For a look at all of today’s economic events, check out our economic calendar.
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