Crude Oil Price Update – Daily Chart Indicates Strength Over $57.19, Weakness Under $55.60

U.S. West Texas Intermediate crude oil futures are in a position to close lower for the day and the week on Friday. After a steady trade early in the session, support was pulled out from under the market after Iran said the United States offered to lift their sanctions on the rogue nation in exchange for negotiations.

At 20:35 GMT, November WTI crude oil futures are trading $55.99, down $0.42 or -0.74%. This is up from the session low of $54.75.

The low of the session was put in after President Trump said he responded “of course, No!” to Iran who he said wanted him to lift the sanctions in order to meet. The State Department called the report “baseless,” adding the U.S. is committed to zero oil exports from the Iranian regime, Bloomberg News said.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through $53.93 will change the main trend to down.

The price gap on the daily chart from September 13 to September 16 has also been filled, indicating traders have erased the risk premium put in the market after the attacks on the Saudi Arabian oil facilities.

The market is down nine sessions from its last main top which puts it inside the window of time for a potentially bullish closing price reversal bottom. A close over $56.41 with form this chart pattern. If confirmed, this could trigger the start of a 2 to 3 day counter-trend rally.

The main range is $50.48 to $63.89. Its retracement zone at $57.19 to $55.60 is currently being tested. This zone is controlling the near-term direction of the market.

Daily Technical Forecast

Based on Friday’s price action and the current price at $55.99, the market is currently in a position to post a daily closing price reversal bottom. Watch the price action and read the order flow at $56.41 at the close.

Finishing over $56.41 will indicate the presence of buyers. This could lead to a higher opening on Monday. A close under this level could mean there is more downside to come.

The close inside the retracement zone at $57.19 to $55.60 is also important. Next week, we could see an upside bias develop on a sustained move over $57.19, and the downside bias continue on a move under $55.60.