Crude Oil Price Update – Fibonacci Level at $60.32 Potential Trigger Point for Upside Breakout

U.S. West Texas Intermediate crude oil futures are trading higher early Monday amid hope of a U.S.-China trade deal after the two economic powerhouses agreed over the weekend to resume trade talks. Traders are hoping a trade deal will relieve concerns over demand and the possibility of a global economic recession.

At 01:49 GMT, August WTI crude oil is trading $59.65, up $1.19 or +2.04%.

Traders are also optimistic that OPEC and its allies will vote to extend the deal to cut production into the end of the year when they meet in Vienna on July 1-2. This news is bullish because it effects the supply side positively.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trade through $59.93 signaled a resumption of the uptrend. A move through $57.75 will change the main trend to down.

The next major upside target is a swing top at $64.03. Before the market can get there, however, buyers must take out the main Fibonacci level at $60.32.

On the downside, support is a short-term Fibonacci level at $58.97, a main 50% level at $58.50 and a short-term 50% level at $57.41.

After the trend changes to down, the trigger point for an acceleration to the downside will be $57.41.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the August WTI crude oil market on Monday is likely to be determined by trader reaction to the short-term Fibonacci level at $58.97.

Bullish Scenario

A sustained move over $58.97 will indicate the presence of buyers. If this move generates enough upside momentum then look for the buying to possibly extend into the main Fibonacci level at $60.32. This is the potential trigger point for an acceleration to the upside with $64.03 a potential near-term target.

Bearish Scenario

A sustained move under $58.97 will signal the presence of sellers. This is followed closely by the main 50% level at $58.50.

If $58.50 fails as support then look for the selling to possibly extend into the main bottom at $57.75, followed by the short-term 50% level at $57.41. This is the trigger point for a potential acceleration to the downside with the next major targets a pair of bottoms at $50.98 and $50.79.

Overview

The market is trading inside a pair of retracement zones, which could create a choppy, two-sided trade. Essentially, we’re looking for a strong upside bias to develop on a sustained move over $60.32 and for a strong downside bias to develop on a sustained move under $57.41.