The direction of the June WTI crude oil market on Monday is likely to be determined by trader reaction to the short-term Fibonacci level at $63.47.
U.S. West Texas Intermediate crude oil futures are inching lower early Monday, following a 6% gain last week. The market is being supported by friendly demand outlooks from IEA and OPEC and a rapidly improving global economy. However, lingering concerns over rising COVID-19 cases may be keeping a lid on prices, suggesting the weakness is being fueled by profit-taking.
At 01:04 GMT, June WTI crude oil futures are trading $62.83, down $0.36 or -0.57%.
The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through $66.15 will change the main trend to up. A move through $57.29 will signal a resumption of the downtrend.
The minor trend is up. This is controlling the momentum. The minor trend will change to down on a trade through $57.68. A new minor top has formed at $63.94. A trade through this price will reaffirm the minor trend.
The short-term range is $67.29 to $57.29. The market is currently testing its retracement zone at $62.29 to $63.47. Sellers are trying to form a potentially bearish secondary lower top. Buyers are trying to drive the market higher.
The minor range is $57.29 to $63.94. Its 50% level at $60.61 is a potential support price.
The main range is $67.29 to $51.04. Its retracement zone at $59.17 to $57.25 is potential support. It’s also controlling the near-term direction of the market.
The direction of the June WTI crude oil market on Monday is likely to be determined by trader reaction to the short-term Fibonacci level at $63.47.
A sustained move under $63.47 will indicate the presence of sellers. The first potential downside target is the short-term 50% level at $62.29.
Buyers could come in on the first test of $62.29, but if it fails then look for the selling to possibly extend into the minor 50% level at $60.61.
A sustained move over $63.47 will signal the presence of buyers. The first upside target is the minor top at $63.94. Overtaking this level could trigger the start of a drive into $66.15, followed by $67.20.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.