Crude Oil Price Update – Holding Steady Inside Major Retracement Zone at $63.36 to $59.70

U.S. West Texas Intermediate crude oil futures are trading sharply higher on Tuesday, recovering more than half of yesterday’s losses. Today’s surge is being fueled by reports of a drone attack at oil pumping stations in Saudi Arabia and a strong rebound in U.S. equity markets over optimism regarding U.S.-China trade relations.

At 16:36 GMT, July WTI crude oil is trading $62.09, up $0.88 or +1.44%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum shifted to the upside on Monday after buyers took out $63.05, confirming the closing price reversal bottom from May 6.

A trade through $63.48 will indicate the counter-trend rally is getting stronger. A move through $60.10 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The main range is $75.20 to $44.20. Its retracement zone at $59.70 to $63.36 is controlling the longer-term direction of the market. WTI is currently trading inside this retracement zone.

The short-term range is $66.44 to $60.10. Its retracement zone at $63.27 to $63.95 is another potential upside target.

Combining both retracement zones creates a major resistance area at $63.27 to $63.36. Upside momentum is likely to increase if buyers can take out this area.

Daily Technical Forecast

There’s not much to say about the direction of the market into the close. We’re in a momentum driven market today so if this continues to grow then buyers will make a run at a cluster of levels at $63.27, $63.36 and $63.48. Buyers could trigger a surge into this area, but unless they are able to take out $63.48 with rising volume, the rally is likely to die on the vine and the market will once again remain rangebound.

The market is being underpinned today by geopolitical concerns, but it may take a bullish report from the American Petroleum Institute at 20:30 GMT and the Energy Information Administration on Wednesday to drive the market through resistance.