Crude Oil Price Update – Rangebound; $62.36 First Upside Target, $59.58 First Downside Target

U.S. West Texas Intermediate crude oil futures are trading lower early Monday with gains capped by worries about a drop in demand for fuel products in the wake of yet more European lockdowns dominated trading.

Reuters is reporting that Germany plans to extend a lockdown to contain COVID-19 infections into a fifth month, according to a draft proposal, after new cases exceeded levels authorities saw will cause hospitals to be overstretched.

At 08:34 GMT, May WTI crude oil is trading $60.99, down $0.45 or -0.73%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $58.28 will signal a resumption of the downtrend. The main trend will change to up on a move through $66.44.

The main range is $51.37 to $67.79. Its retracement zone at $59.58 to $57.64 is support. This zone stopped the selling on Thursday at $58.28. This zone is controlling the near-term direction of the market.

The first minor range is $66.44 to $58.28. Its 50% level at $62.36 is the first upside target.

The second minor range is $67.79 to $58.28. Its retracement zone at $63.04 to $64.16 is an important resistance area.

Daily Swing Chart Technical Forecast

There is no trigger point in the market, but momentum is controlling the price action.

Bullish Scenario

If the counter-trend buying is strong enough then look for a surge into a series of potential resistance levels at $62.36, $63.04 and $64.16. Since the main trend is down, sellers are likely to come in on a test of these levels.

Bearish Scenario

If trend traders return then look for a possible retest of $59.58 to $57.64.

Side Notes

The trigger point for an upside breakout is $64.16. On the downside, $57.64 is the trigger point for an acceleration with $51.37 the next likely target price.