Crude Oil Price Update – Starts Session in Window of Time for Closing Price Reversal Top

U.S. West Texas Intermediate crude oil futures dipped early in the session on Friday before clawing back to nearly unchanged. The catalysts behind the price action are concerns the trade war between the United States and China could intensify, although looming U.S. sanctions against Iran’s oil exports helped limit earlier losses. The market is currently in a position to finish over 5.38% higher for the week.

At 0149 GMT, October WTI crude oil is trading $70.26, up $0.01 or +0.01%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The market is in no position to change the main trend to down, but it is in the window of time for a potentially bearish closing price reversal top. If formed and confirmed, this chart pattern could lead to a 2 to 3 day correction.

The main range is $71.29 to $63.89. Its retracement zone at $68.46 to $67.59 is support. It is also controlling the near-term direction of the market.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the October WTI crude oil futures contract is likely to be determined by trader reaction to yesterday’s high at $70.50.

Taking out $70.50 and sustaining the rally will indicate the presence of buyers. If this move creates enough upside momentum then look for buyers to make a run at a pair of tops at $71.05 and $71.29. Keep an eye on the volume because in order to generate a strong breakout to the upside, the buying volume has to be better-than-average.

A failure to take out $70.50 will signal the presence of sellers. If the selling is strong enough to take out yesterday’s low at $69.55 then $70.50 will become a minor top. The first downside target is the Fibonacci level at $68.46 so there is plenty of room to the downside.

Taking out $70.50 then turning lower for the session will indicate the selling is greater than the buying at current price levels. This will also put the market in a position to form a potentially bearish closing price reversal top. This could shift momentum to the downside and trigger the start of a 2 to 3 day correction.