Crude Oil Price Update – Closed Inside Retracement Zone that Will Determine Longer-Term Direction

U.S. West Texas Intermediate (WTI) crude oil futures rose on Friday, but finished a little off their highs as concerns that continued spread of the novel coronavirus could stall the United States’ economic rebound.

Early in the session, prices surged after Iraq and Kazakhstan, during a meeting of an OPEC+ panel on Thursday, pledged to comply better with oil cuts, sources said. This means curbs by OPEC and its allies could deepen in July.

On Friday, August WTI crude oil futures settled at $39.83, down from an intraday high of $40.60.

Early buyers were spooked into selling after Boston Federal Reserve President Eric Rosengren repeated his view that the U.S. unemployment rate will likely be “at double-digit levels” at the end of 2020 and cautioned against reopening the economy too quickly after the end of lockdowns aimed at containing the virus.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $40.69 will signal a resumption of the uptrend. A move through $34.66 will change the main trend to down.

The main range is $54.71 to $20.28. Its retracement zone at $37.50 to $41.56 is controlling the longer-term direction of the market. On Friday, the market closed inside this zone.

Short-Term Outlook

Trader reaction to $37.50 to $41.56 will set the tone next week.

A sustained move over $41.56 will indicate the presence of buyers. This could trigger an acceleration to the upside, or a long grind. Either way, the main objective remains the February 20 main top at $54.71.

A sustained move under $37.50 will signal the presence of sellers. Since the main trend is up, the selling pressure could be a little labored until the trend changes to down on a move through the nearest main bottom at $34.66.

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