Crude Oil Price Update – Straddling Retracement Zone at $58.51 to $60.33

U.S. West Texas Intermediate crude oil futures are trading higher at the mid-session despite giving back more than half of its earlier gains. Earlier in the session, prices surged on reports that OPEC and its allies were close to extending production cuts. News of the resumption of trade talks between the United States and China also boosted investor sentiment.

At 15:55 GMT, August WTI crude oil is trading $58.93, up $0.45 or +0.79%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session when buyers took out the previous main top at $59.93. The new main bottom is $57.75. A trade through this level will change the main trend to down.

Due to the prolonged move up in terms of price and time, the market is also inside the window of time for a potentially bearish closing price reversal top. If confirmed, this could lead to a 2 to 3 day correction.

The main range is $66.22 to $50.79. The market is currently trading inside its retracement zone at $58.51 to $60.33. This zone is controlling the longer-term direction of the market.

The intermediate range is $64.03 to $50.79. Its retracement zone at $58.97 to $57.41 is support.

The new short-term range is $50.79 to $60.28. If the trend changes to down then its retracement zone at $55.54 to $54.42 will become the primary downside target.

Daily Technical Forecast

Based on the early price action, the direction of the August WTI crude oil futures contract the rest of the session is likely to be determined by trader reaction to the 50% level at $58.51.

Bullish Scenario

A sustained move over $58.51 will indicate the presence of buyers. Overtaking the Fib level at $58.97 will indicate the buying is getting stronger. This could trigger a rebound rally into a series of potential resistance levels at $59.79, $60.33 and $60.41. The latter is the trigger point for an acceleration to the upside with the next target angle coming in at $62.22.

Bearish Scenario

A sustained move under $58.51 will signal the presence of sellers. This could spike prices into the main bottom at $57.75. Taking out this bottom will change the main trend to down.

The first target is a 50% level at $57.41. The daily chart starts to open up to the downside under this level with another 50% level at $55.54 the next major target.