Crude Oil Price Update – Rally Fizzles After Confirming Weekly Closing Price Reversal Bottom

U.S. West Texas Intermediate crude oil is trading slightly higher after giving back most of its earlier gains. Underpinning prices is the hope that OPEC and its allies will agree to extend the program that is designed to cut production, trim the excess supply and stabilize prices. The original program has been working since January 1. The new agreement is expected to extend the program from July 1 until the end of the year.

At 15:31 GMT, July WTI crude oil is trading $53.89, down $0.10 or -0.15%.

Gains are being capped today and prices are being pressured by a report from China that showed a drop in May crude oil imports. The move is expected to be short-lived because the drop was fueled by the adherence to sanctions against Iran and not by the U.S.-China trade dispute.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher due to the weekly closing price reversal bottom and today’s subsequent confirmation of the chart pattern. The main trend is in no position to change to up, however, since the main top is at $63.96.

A trade through $50.60 will signal a resumption of the downtrend.

One major retracement zone is $55.32 to $52.70. This zone is currently being tested. Traders are trying to establish a support base inside this zone.

The short-term range is $63.96 to $50.60. Its retracement zone at $57.28 to $58.86 is the primary upside target. Since the main trend is down, sellers are likely to come in on a test of this area.

Daily Technical Forecast

Based on today’s price action, the direction of the July WTI crude oil market the rest of the session is likely to be determined by trader reaction to the uptrending Gann angle at $53.60.

Bullish Scenario

Holding the Gann angle at $53.60 will indicate the presence of buyers. If the move can generate enough upside momentum then look for a potential drive into the 50% level at $55.32.

Bearish Scenario

A sustained move under $53.60 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the Fibonacci level at $52.70, followed by the uptrending Gann angle at $52.10.