Crude Oil Price Update – Main Trend Up, Short-Term Momentum Down

U.S. West Texas Intermediate crude oil futures are trading lower on profit-taking and some concerns over future demand due to a weakening global economy. After hitting a 5-month high on April 10, the rally stalled. Although the market continues to be underpinned by the OPEC-led supply cuts and U.S. sanctions against Iran and Venezuela, buyers are looking for the next catalyst to drive prices higher.

At 10:54 GMT, June WTI crude oil is trading $63.44, down $0.58 or -0.91%.

The market is also getting some support from worries over a potential supply disruption in Libya, however, until this actually occurs, speculators don’t seem willing to chase the market higher. Instead they may be playing for a pull-back into a value zone.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has shifted to the downside. A trade through $64.71 will signal a resumption of the uptrend. The main trend will change to down on a move through $61.92.

The minor trend is down. It turned down earlier today when sellers took out the minor bottom at $63.39.

The major Fibonacci level at $63.48 is controlling the longer-term direction of crude oil.

The short-term range is $61.92 to $64.71. Its retracement zone at $63.32 to $62.99 is the first downside target. Since the main trend is up, buyers may come in on the initial test of this zone.

The main range is $58.41 to $64.71. If the main trend changes to down then look for sellers to drive the market into its retracement zone at $61.56 to $60.81.

Daily Technical Forecast

Based on the early price action and the current price at $63.44, the direction of the June WTI crude oil market on Monday is likely to be determined by trader reaction to $63.48 and $63.32.

Bullish Scenario

A sustained move over $63.48 will signal the return of buyers. If this creates enough upside momentum then look for the rally to extend into the next uptrending Gann angle at $64.41. Overcoming this angle will put the market in a strong position with potential targets $64.70 and $64.71.

Bearish Scenario

A sustained move under $63.32 will indicate the presence of sellers. This could extend the selling into the short-term Fibonacci level at $62.99. This is followed by an uptrending Gann angle at $62.67.