Crude Oil Price Update – Straddling Major 50% Level at $55.29

Based on the early price action and the current price at $54.93, the direction of the September WTI crude oil market into the late session is likely to be determined by trader reaction to the 50% level at $55.29.
James Hyerczyk
Crude Oil

U.S. West Texas Intermediate crude oil futures are trading lower on Monday, but basically rangebound as investors try to sort out the major events hitting the financial markets. Helping to provide support is probably the weaker U.S. Dollar. This may be helping to boost demand for the dollar-denominated asset. However, expectations of lower demand due to escalating tensions between the United States and China could also be capping gains.

At 05:16 GMT, September WTI crude oil futures are trading $54.93, down $0.73 or -1.29%.

Whatever the reason, today’s price action indicates investor indecision.

Daily September WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through last week’s low at $53.59 will signal a resumption of the downtrend. The next target bottoms are $51.15 and $50.91. The main trend will change to up on a trade through $58.82.

The first major range is the October 3, 2018 top at $74.44 to the December 26, 2018 bottom at $44.66. Its retracement zone at $59.55 to $63.06 is resistance.

The second major range is the December 26, 2018 main bottom at $44.66 to the April 23, 2019 main top at $65.92. Its retracement zone at $55.29 to $52.78 is potential support. This zone is currently being tested.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at $54.93, the direction of the September WTI crude oil market into the late session is likely to be determined by trader reaction to the 50% level at $55.29.

Bearish Scenario

A sustained move under $55.29 will indicate the presence of sellers. If this move attracts sellers then look for the break to extend into last week’s low at $53.59. If this low is taken out then look for the selling to continue into the major Fibonacci level at $52.78.

Bullish Scenario

Overtaking and sustaining a rally over $55.29 will signal the return of buyers. This could trigger a short-covering rally into the close.

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