Crude Oil Price Update – Sitting inside Long-Term Retracement Zone at $59.29 to $62.64

U.S. West Texas Intermediate crude oil futures are trading nearly flat on Tuesday shortly after the regular session opening as traders await reports on the progress of the repairs to major oil production facilities in Saudi Arabia, and whether the U.S. will respond militarily to the weekend attacks. With an aggressive military response from the U.S. unlikely, the main driver of the price action going forward will be time, specifically how long it will take the Saudis to get back to full production.

At 12:41 GMT, November WTI crude oil futures are trading $61.88, down $0.79 or -1.26%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on Monday when buyers took out the swing top at $58.64. It was reaffirmed when tops at $58.85, $60.77 and $63.52 were violated. A trade through $53.93 will change the main trend to down.

The market is currently trading inside a major retracement zone at $59.29 to $62.64. Trader reaction to this zone will determine the longer-term direction of the market.

The new short-term range is $53.93 to $63.89. Its retracement zone at $58.91 to $57.73 is additional support. Buyers came in on a test of this zone on Monday.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at $61.88, the direction of the November WTI crude oil futures contract on Tuesday is likely to be determined by trader reaction to the major Fibonacci level at $62.64.

Bullish Scenario

A sustained move over $62.64 will indicate the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into yesterday’s high at $63.89.

Taking out $63.89 will indicate the buying is getting stronger. This could trigger a rally into the April 25 top at $65.23.

Bearish Scenario

A sustained move under $62.64 will signal the presence of sellers. The nearest support cluster comes in at $59.29 to $58.91. Since the main trend is up, buyers are likely to come in on a test of this area.