The direction of the May WTI crude oil futures contract on Friday is likely to be determined by trader reaction to $59.95 and $59.58.
U.S. West Texas Intermediate crude oil futures are trading flat early Friday, supported by a weaker U.S. Dollar and capped by worries over rising supplies and the impact on fuel demand from the COVID-19 pandemic. A weaker dollar makes oil cheaper for holders of other currencies, which usually helps boost crude prices.
At 06:46 GMT, May WTI crude oil is trading $59.54, down $0.06 or -0.10%.
The May futures contract is on pace to post a 2% – 3% loss this week after a decision by OPEC and its allies, including Russia, to gradually increase supplies by 2 million barrels per day between May and July.
Rollover to the June WTI crude oil futures contract on Monday.
The main trend is down according to the daily swing chart. A trade through $57.25 will signal a resumption of the downtrend. The main trend will change to up on a move through $66.44.
If sellers take out $57.63 then $62.27 will become a new main top.
The main range is $51.37 to $67.79. The market is currently testing its retracement zone at $59.58 to $57.64.
The minor range is $62.27 to $57.63. Its 50% level at $59.95 is potential resistance.
The first short-term range is $66.44 to $57.25. Its 50% level at $61.85 is another resistance level.
The second short-term range is $67.79 to $57.25. Its retracement zone at $62.52 to $63.76 is another resistance zone.
The direction of the May WTI crude oil futures contract on Friday is likely to be determined by trader reaction to $59.95 and $59.58.
A sustained move over $59.95 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for a potential acceleration to the upside with the next target a resistance cluster at $61.75, $61.85, $62.27 and $62.52.
A sustained move under $59.58 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the support cluster at $57.64, $57.63, $57.25 and $57.06. The latter is a potential trigger point for an acceleration to the downside.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.