Crude Oil Price Update – In Position to Cross to Bearish Side of Major Retracement Zone

September West Texas Intermediate crude oil futures are trading lower Thursday, pressured by yesterday’s bearish U.S. Energy Information Administration’s bearish inventories report and concerns that a prolonged trade war would lead to an economic slowdown and lower demand.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $67.56 on Wednesday turned the main trend down. The downtrend was reaffirmed earlier today. If the downside momentum continues then look for the selling to possibly extend into the July 18 main bottom at $66.29.

The short-term range is $72.98 to $66.29. Its retracement zone at $69.64 to $70.42 is resistance. This zone stopped the rally earlier in the week at $70.43.

The main range is $62.99 to $72.98. The market is currently testing its retracement zone at $67.99 to $66.81. This zone is also controlling the longer-term direction of the market.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the September WTI crude oil market the rest of the session will be determined by trader reaction to the main Fibonacci level at $66.81.

Holding $66.81 will indicate the return of buyers. If they are able to create enough upside momentum, we could see a short-covering rally into the main 50% level at $67.99. Sellers could come in on the first test of this level. However, look for the short-covering rally to strengthen if buyers can overcome $67.99.

A sustained move under $66.81 will indicate the presence of sellers. This could trigger a quick break into the main bottom at $66.29. This is the trigger point for an acceleration to the downside. The daily chart indicates there is plenty of room to the downside with the June 18 main bottom at $62.99 the next major target.