Crude Oil Price Update – Set-Up for Rally, or Closing Price Reversal Top?Based on the early price action, the direction of the August WTI Crude Oil futures market will be determined by trader reaction to the steep uptrending Gann angle at $73.40. This angle, moving up at a rate of $1.00 per day, has been guiding the market higher since the June 18 main bottom at $63.40.
U.S. West Texas Intermediate crude oil is attempting to rebound from earlier weakness. Prices were driven lower early in the session on reports of rising output from Saudi Arabia and Russia. However, the early sell-off drew in some buyers who may still be betting on a short-term shortage in supply because of unplanned outages in Canada, Venezuela and Libya along with looming sanctions on Iran.
Let’s just leave it at this, the market is unsettled.
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At 1106 GMT, August WTI Crude Oil is trading $74.12, down $0.03 or -0.04%.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through 74.46 will signal a resumption of the uptrend. Due to the prolonged move up in terms of price and time, today’s session begins with the market in the window of time for a potentially bearish closing price reversal top.
On the downside, the first target is a long-term Fibonacci level at $70.51.
On the upside, the nearest targets are the November 21, 2014 main top at $79.72 and the November 13, 2014 main top at $81.09.
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Daily Technical Forecast
Based on the early price action, the direction of the August WTI Crude Oil futures market will be determined by trader reaction to the steep uptrending Gann angle at $73.40. This angle, moving up at a rate of $1.00 per day, has been guiding the market higher since the June 18 main bottom at $63.40.
A sustained move over $73.40 will indicate the presence of buyers. If this creates enough upside momentum then look for a test of $74.46. We could see sellers on the first test of this level, but watch for an acceleration to the upside if buyers can sustain the rally.
Taking out $74.46 then moving back below Friday’s close at $74.15 will indicate the selling is greater than the buying at current price levels. This will also put the market in a position to post a potentially bearish closing price reversal top. While this chart pattern will not signal a change in trend, it could trigger the start of a 2-3 day correction.
A sustained move under $73.40 will signal the presence of sellers. The daily chart is wide open to the downside with the next target $70.51. If this fails then look for a potential move into an uptrending Gann angle at $68.40.