Crude Oil Price Update – Strengthens Over $58.03, Weakens Under $57.29

U.S. West Texas Intermediate crude oil futures are trading higher on Monday shortly after the regular session opening in a relatively low volume, low volatility session. Concerns over potential escalating tensions between the U.S. and Iran are helping to underpin the market, while gains are being limited by the possibility the two sides will sit down at the negotiation table.

At 13:00 GMT, August WTI crude oil is trading $57.93, up $0.50 or +0.85%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend continued earlier today when buyers took out Friday’s high at $57.98. The trend will resume on an intraday basis if buyers can take out $58.22.

The main trend will turn down on a trade through $50.98. This is highly unlikely, but the market is in a position to post a potentially bearish closing price reversal top.

The main range is $64.03 to $50.79. The market is currently testing its retracement zone at $57.41 to $58.97. This zone is controlling the near-term direction.

If a range forms between $50.79 and $58.22 then its retracement zone at $54.51 to $58.97 will become the primary downside target.

Daily Technical Forecast

Based on the earlier price action, the direction of the August WTI crude oil market will be determined by trader reaction to Friday’s close at $57.43.

Bullish Scenario

A sustained move over $57.43 will indicate the presence of buyers. If this move creates enough upside momentum then look for buyers to make another run at the downtrending Gann angle at $58.03, followed by today’s intraday high at $58.22.

Taking out $58.22 could trigger an extension of the rally into the Fibonacci level at $58.97. Look for an acceleration to the upside if buyers take out this level with conviction. This could trigger a move into the next downtrending Gann angle at $61.03.

Bearish Scenario

A sustained move under $57.43 will signal the presence of sellers. Taking out the 50% level at $57.41 and the uptrending Gann angle at $57.29 will indicate the selling pressure is getting stronger. This could trigger an acceleration to the downside with the next target a 50% level at $54.51.

Overview

Basically, the market just needs to close higher today or a closing price reversal top will form. If confirmed this could lead to a 2 to 3 day correction. Another way to look at the market: Stronger over $58.03, weaker under $57.29.