Crude Oil Price Update – Main Trend Changes to Up on Trade Through $69.31Based on the early price action, the direction of the September WTI crude oil market on Wednesday is likely to be determined by trader reaction to the 50% level at $67.99. The main trend is down according to the daily swing chart. A trade through $69.31 will change the main trend to up. This will also make $67.56 a new main bottom.
U.S. West Texas Intermediate oil futures are trading slightly higher early Wednesday. The market is being supported by the American Petroleum Institute’s weekly inventories report which showed bigger-than-expected draw downs in crude oil, gasoline and distillates.
At 630 GMT, September WTI crude oil is trading $68.80, up $0.28 or +0.41%.
Crude oil drew down 3.16 million barrels during the week-ending July 21, versus an estimate of 2.331 million barrels. Gasoline inventories fell 4.87 million barrels, well above the forecast for a 713,000 barrel drawdown. Distillate inventories dropped 1.32 million barrels, versus a forecast for a build of 207,000 barrels.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $69.31 will change the main trend to up. This will also make $67.56 a new main bottom.
A failure to take out $69.31 means a move through $66.29 will signal a resumption of the downtrend.
The price action is also being manipulated by a pair of 50% levels.
The main trend is $62.99 to $72.98. Its retracement zone is $67.99 to $66.81. This zone is controlling the longer-term direction of the crude oil market.
The short-term range is $72.98 to $66.29. Its retracement zone at $69.64 to $70.42 is the primary upside target. Even if the trend changes to up on a trade through $69.31, the market is likely to run into resistance inside this zone.
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Daily Swing Chart Technical Forecast
Based on the early price action, the direction of the September WTI crude oil market on Wednesday is likely to be determined by trader reaction to the 50% level at $67.99.
A sustained move over $67.99 will indicate the presence of buyers. If this generates enough upside momentum, then look for a test of $69.31. Taking out this top will indicate the buying is getting stronger. This should lead to a test of $69.64 to $70.42, followed by $70.60.
A sustained move under $67.99 will signal the presence of sellers. Taking out $67.56 indicate the selling is getting stronger. This could drive the market into $66.81 then $66.29. The daily chart is wide open to the downside under $66.29.