Crude Oil Price Update – Retesting Important Support Zone at $53.95 to $53.14

U.S. West Texas Intermediate crude oil futures are slightly lower at the mid-session on Monday after attempting to reverse to the upside following a weak opening. Prices jumped after President Trump said that China is ready to come back to the negotiating table and the two countries will start talking very seriously. Speaking at the G-7 summit in Biarritz in France, Trump praised Chinese President Xi Jinping and welcomed his desire for a deal and for calm.

At 16:05 GMT, October WTI crude oil futures are trading $54.10, down $0.07 or -0.11%.

Prices have stagnated since the early surge, probably because China never validated Trump’s statement. However, the economic powerhouse hasn’t denied it either. Chinese Foreign Ministry spokesman Geng Shuang said he had not heard about a phone call between the two sides.

On a positive note, China’s top negotiator, Vice Premier Liu He said early Monday that Beijing was willing to solve the impasse through “calm” negotiations and opposed an escalation.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through the intraday low at $52.96 will signal a resumption of the downtrend. The main trend changes to up on a trade through $57.13.

The short-term range is $50.50 to $57.40. Its retracement zone at $53.95 to $53.14 is potential support.

The main range is $60.93 to $50.50. Its retracement zone at $55.72 to $56.95 is resistance. It stopped rallies at $57.13 and $57.40 earlier this month.

Daily Technical Forecast

Based on the early price action and the current price at $54.10, the direction of the October WTI crude oil market into the close is likely to be determined by trader reaction to the short-term 50% level at $53.95.

Bearish Scenario

A sustained move under $53.95 will indicate the return of sellers. Taking out the uptrending Gann angle at $53.75 will indicate the selling is getting stronger. This could trigger a break into the short-term Fibonacci level at $53.14 and a downtrending Gann angle at $52.90.

Crossing to the weak side of the angle at $52.90 will put the market in a bearish position with the next target angles coming in at $52.13 and $51.31. The latter is the last potential support angle before the $50.50 main bottom.

Bullish Scenario

A sustained move over $53.95 will signal that buyers may be coming in to defend against a steep sell-off. If this move creates enough upside momentum, we could see a retest of the downtrending Gann angle at $55.15. This angle stopped the rally earlier today.