Advertisement
Advertisement

Crude Oil Price Update – Daily, Weekly Closing Price Reversal Tops Setting Bearish Tone

By:
James Hyerczyk
Updated: Jun 20, 2022, 01:49 UTC

Sellers are focusing primarily on the Fed’s aggressive 75-basis-point rate hike, a plunge in equity prices and fears of a possible global recession.

WTI Crude Oil

In this article:

U.S. West Texas Intermediate crude oil futures are edging lower on Friday as interest rate hikes from major central banks are fueling worries about a sharp economic slowdown that could lead to a drop in demand. Today’s weakness is also solidifying the chances of its first weekly decline in eight weeks.

At 12:47 GMT, August WTI crude oil futures are trading $114.60, down $0.65 or -0.56%. On Thursday, the United States Oil Fund ETF (USO) settled at $87.67, up $0.74 or +0.85%.

Worries over tight supply took a back seat this week with traders focusing primarily on the Fed’s aggressive 75-basis-point rate hike, a huge drop in equity prices and fears of a possible global recession.

The price action suggests investors may be getting distracted by rising interest rates and inflation, which may lead to a shift in the focus for traders from tight supplies to affordability.

Daily August WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower.

A trade through $100.66 will change the main trend to down. A move through $120.88 will signal a resumption of the uptrend.

The minor trend is down. This is controlling the momentum. A trade through $110.43 will reaffirm the downtrend.

The minor range is $120.88 to $110.43. Its retracement zone at $115.66 to $116.89 is resistance. This area stopped the buying earlier today at $116.58.

The short-term range is $100.66 to $120.88. Its retracement zone at $110.77 to $108.38 is support. This area stopped the selling at $110.43 on Thursday.

Daily Swing Chart Technical Forecast

Trader reaction to $115.66 to $116.89 is likely to determine the direction of the August WTI crude oil market on Friday.

Bearish Scenario

A sustained move under the minor 50% level at $115.66 will indicate the presence of sellers. The first downside target is a minor pivot at $113.50. If this level fails as support then look for the selling to possibly extend into $110.77 to $108.38.

Bullish Scenario

A sustained move over $115.66 will signal the presence of buyers. Overtaking the Fibonacci level at $116.89 will indicate the buying is getting stronger. If this move creates enough upside momentum then look for the rally to possibly extend into $120.88 over the near-term.

Side Notes

The market is starting to look a little bearish. The first sign of weakness will be the formation of a secondary lower top at $116.58. A lower close for the week will produce a potentially bearish closing price reversal top. If confirmed, we could see the start of a 2 – 3 week correction.

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

About the Author

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.

Did you find this article useful?

Advertisement