Crude Oil Price Update – Move Under $61.59 Sets Up Reversal TopGiven the prolonged move up in terms of price and time, the direction of the May WTI crude oil futures market on Tuesday is likely to be determined by trader reaction to yesterday’s close at $61.59.
U.S. West Texas Intermediate crude oil futures are trading higher on Tuesday shortly after the regular session opening, however, the market is giving back some of its earlier gains. The market was underpinned earlier in the session by reports that the Trump administration was preparing to impose additional tariffs on Iran and that a major exporting facility in Venezuela was shutting down.
At 12:49 GMT, May WTI crude oil futures are trading $61.81, up $0.22 or +0.37%.
Crude oil continues to be underpinned by the OPEC-led supply cuts and the U.S. sanctions against Iran and Venezuela. Earlier today, prices fell slightly after orders for durable goods fell in February for the first time in four months and business investment continued to soften, reflecting a slower U.S. economy early in the new year.
Daily Technical Analysis
The main trend is up according to the daily swing chart. The market is in no position to change the trend to down, but due to the steep rally, it is vulnerable to a closing price reversal top. A trade through $58.17 will change the main trend to down.
The nearest upside target is a major Fibonacci level at $63.45. The nearest support is a major 50% level at $59.63.
Daily Technical Forecast
Given the prolonged move up in terms of price and time, the direction of the May WTI crude oil futures market on Tuesday is likely to be determined by trader reaction to yesterday’s close at $61.59.
A sustained move over $61.59 will indicate the presence of buyers. If this move creates enough upside momentum then look for an eventual rally into the Fib at $63.45.
A sustained move under $61.59 will signal that the selling is greater than the buying at current price levels. This could trigger a break into a steep uptrending Gann angle at $61.17. Look for a technical bounce on the first test of this angle. If it fails then look for a potential acceleration to the downside with the next target a support cluster at $59.67 to $59.63.