Crude Oil Price Update – In Position to Challenge $71.63, Failure at $69.76 Could Spike Market into $67.88

October West Texas Intermediate crude oil futures settled higher for a second consecutive week, putting itself in a position to challenge its late June and mid-May tops. Supply concerns primarily supported the market. Uncertainty over the impact of the U.S. sanctions on Iran and lower production from Venezuela were the two catalysts driving prices higher. Helping to limit gains were worries that the trade dispute between the United States and China would eventually lead to lower demand.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. A trade through $71.29 will signal a resumption of the uptrend. This could lead to a test of the contract high at $71.63. The weekly trend will change to down on a move through $62.60.

The minor trend is also up. A trade through $63.89 will change the minor trend to down and shift momentum to the downside.

The main range is $71.63 to $62.60. Its 50% level or pivot is $67.12. This level is support. It’s also controlling the near-term direction of the market.

Weekly Technical Forecast

Based on last week’s close at $69.80, the direction of the October WTI crude oil futures contract is likely to be determined by trader reaction to the downtrending Gann angle at $68.76.

A sustained move over $69.76 will indicate the presence of buyers. If this creates enough upside momentum, we could see a move into the next downtrending Gann angle at $70.69. This is the last potential resistance angle before the tops at $71.29 and $71.63.

Overtaking $71.63 and sustaining the move will put the market in a bullish position.

A sustained move under $69.76 will signal the presence of sellers. If this creates enough downside momentum, we could see a steep break into the next downtrending Gann angle at $67.88. This is followed by the major 50% level at $67.12.

The market should be able to maintain its long-term upside bias as long as it remains over the pivot at $67.12.