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Crude Oil Price Update – Not Too Complicated: Strengthens Over $75.27, Weakens Under $72.14

By:
James Hyerczyk
Updated: Jul 8, 2018, 21:30 UTC

Based on last week’s chart pattern and the close at $73.80, the direction of the August WTI crude oil market this week will be determined by trader reaction to last week’s high at $75.27 and last week’s low at $72.14. Holding between these levels will form an inside move. This will indicate investor indecision and impending volatility.

Crude Oil

U.S. West Texas Intermediate crude oil futures settled lower last week. Although it posted a higher-high, lower-close, it did manage to close above the mid-point of the week and the opening. This suggests there is some resistance in the market, but not enough to attract short-sellers.

August WTI crude oil settled at $73.80, down $0.35 or -0.47%.

The market is being underpinned at this time because the bullish fundamentals outweigh the bearish fundamentals. Although this could change with information we are not aware of at this time.

A few of the bullish fundamentals include the on-going production cuts by OPEC-led producers, supply disruptions in Canada, Venezuela and Libya, and the looming sanctions on Iran which are expected to cut nearly 5% of the world’s oil supply from the market.

A few of the potentially bearish fundamentals are increased production from Saudi Arabia, Russia and the United States. Traders are also watching for signs of lower demand due to global economic downturns caused by the escalating trade dispute between the United States and China.

WTI Crude Oil
Daily August WTI Crude Oil

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. After a four-week setback, the uptrend resumed two weeks ago when buyers took out the main top at $72.70. A trade through $75.27 will signal a resumption of the uptrend. Based on the swing chart, the next target would then come in at $81.09.

Traders should watch the price action and read the order flow at $72.14 this week. Taking out this level will confirm the potentially bearish higher-high, lower-close chart pattern. Crossing to the weak side of the previous top at $72.70 will mean the selling is getting stronger.

The first target is the long-term Fibonacci level at $70.51. This is followed by the short-term retracement zone at $69.34 to $67.93. A move into these levels will indicate the market is correcting while a trade through $63.40 will change the main trend to down.



Weekly Technical Forecast

Based on last week’s chart pattern and the close at $73.80, the direction of the August WTI crude oil market this week will be determined by trader reaction to last week’s high at $75.27 and last week’s low at $72.14. Holding between these levels will form an inside move. This will indicate investor indecision and impending volatility.

Taking out $75.27 will signal the presence of buyers. This will also put crude oil on the strong side of a long-term downtrending Gann angle at $75.08. If buyers can turn these levels into support then look for them to make a run at the steep uptrending Gann angle at $75.40.

Crossing to the strong side of $75.40 will indicate the buying is getting stronger. This could trigger a surge into the long-term downtrending Gann angle at $78.10. This is the last potential resistance angle before the $81.09 main top.

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About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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