Crude Oil Price Update – Strengthens Over $58.66, Weakens Under $57.94

Based on the early chart pattern and the current price at $58.37, the direction of the September WTI crude oil market is likely to be determined by trader reaction to the 50% level at $57.94 and the Fibonacci level at $58.66.
James Hyerczyk
Crude Oil

U.S. West Texas Intermediate crude oil futures are trading higher on Wednesday, shortly before the release of the U.S. Energy Information Administration (EIA) weekly inventories report at 14:30 GMT. Traders are looking for a 2.5 million barrel draw down. Today’s early strength is being fueled by a bullish report from the American Petroleum Institute (API) late Tuesday. It showed a bigger-than-expected draw down.

At 14:14 GMT, September WTI crude oil futures are trading $58.37, up $0.32 or +0.54%.

Daily September WTI Crude Oil

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through $61.02 will change the main trend to up. A move through $54.85 will signal a resumption of the downtrend.

The minor trend is up. It turned up on Tuesday when buyers took out $57.64. This move shifted momentum to the upside.

The short-term range is $61.02 to $54.85. Its retracement zone at $57.94 to $58.66 is currently being tested. This zone overlaps the main 50% level at $58.41. This area is controlling the direction of the market today.

Daily Technical Forecast

Based on the early chart pattern and the current price at $58.37, the direction of the September WTI crude oil market is likely to be determined by trader reaction to the 50% level at $57.94 and the Fibonacci level at $58.66.

Bullish Scenario

A sustained move over $58.66 will indicate the presence of buyers. This could create the upside momentum needed to challenge the downtrending Gann angle at $59.27. Sellers could come in on the first test of this angle. Overcoming it could trigger a rally into the resistance cluster at $60.15 to $60.18.

Bearish Scenario

A sustained move under $57.94 will signal the presence of sellers. The first two downside targets are Gann angles at $57.52 and $57.10. If $57.10 fails then look for the selling to possibly extend into $56.00 and $55.79.

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