Crude Oil Price Update – Rangebound Inside a Pair of Retracement Zones

U.S. West Texas Intermediate crude oil futures are weaker early Thursday after finishing lower for a fourth straight session. Weighing on prices were concerns about weaker demand in Europe after several countries paused the use of AstraZeneca’s COVID-19 vaccine on worries over possible side effects and rising U.S. crude inventories.

Traders are also monitoring the movement in the U.S. Dollar since its direction will have an influence on demand for the dollar-denominated commodity.

At 05:35 GMT, May WTI crude oil futures are trading $64.33, down $0.30 or -0.46%.

Prices were also pressured on Wednesday after government data showed U.S. crude inventories rose 2.4 million barrels last week. Analysts were looking for an increase of 2.8 million barrels.

Finally, comments from the International Energy Agency (EIA) also pressured prices when they said that oil prices are unlikely to mount a dramatic and sustained surge despite vaccines expected to boost demand later this year.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but the formation of a secondary lower top suggests the trend may be getting ready to turn down. Furthermore, momentum has been trending lower since the formation of a closing price reversal top on March 8.

A trade through $63.10 will change the main trend to down. A move through $66.44 will indicate the uptrend has resumed after eight days of sideway-to-lower trading.

The minor range is $67.79 to $63.10. Its retracement zone at $65.45 to $66.00 is potential resistance.

The short-term range is $59.08 to $67.79. Its retracement zone at $63.44 to $62.41 is support. This zone stopped the selling at $63.10 on March 10.

The main range is $51.37 to $67.79. If the main trend changes to down then look for the selling to possibly extend into its retracement zone at $59.58 to $57.64.

Daily Swing Chart Technical Forecast

Thursday’s session begins with the crude oil futures contract trapped between a pair of retracement zones at $65.45 to $66.00 on the upside and $63.44 to $62.41 on the downside. The market isn’t going anywhere until these areas are overcome.

Traders can also use the swing top at $66.44 and the swing bottom at $63.10 as trigger points for direction.