Crude Oil Price Update – Tested Key Retracement Zone at $67.65 to $66.76 on Thursday

U.S. West Texas Crude Oil futures fell sharply on Thursday after government data showed an unexpected build in gasoline inventories during the week-ending August 31. The news offset a bullish drawdown in crude oil inventories. Prices are holding steady early Friday.

At 0531 GMT, October WTI Crude Oil futures are trading $67.85, up $0.08 or +0.10%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. This comes as a surprise to some traders because of the size of the break from this week’s high at $71.40. A trade through $71.40 will signal a resumption of the uptrend. A trade through $63.89 will change the main trend to down.

The main range is $63.89 to $71.40. Its retracement zone is $67.65 to $66.76. This zone was tested on Thursday. Since the main trend is up, buyers could come in on a test of this zone.

If a short-term range forms between $71.40 and $67.00 then its retracement zone at $69.20 to $69.72 will become the primary upside target.

Daily Swing Chart Technical Forecast

Based on yesterday’s close at $67.77 and the early price action, the direction of the October WTI Crude Oil futures contract the rest of the session is likely to be determined by trader reaction to the 50% level at $67.65.

A sustained move over $67.65 will indicate the presence of buyers. If this move can create enough upside momentum then look for a possible rally over the near-term into the short-term retracement zone at $69.20 to $69.72.

A sustained move under $67.65 will signal the presence of sellers. This could drive the market into yesterday’s low at $67.00, followed by the Fibonacci level at $66.76.

The daily chart is wide open under $66.76 so let’s call this the trigger point for a potential acceleration to the downside.