Crude Oil Price Update – Trader Reaction to $69.56 Pivot Will Determine Short-Term Direction

U.S. West Texas Intermediate crude oil futures are trading higher late in the session on Thursday after hitting a 2-year high shortly after the regular session opening. Despite the gain, bullish traders faced a wall of volatility.

At 20:43 GMT, July WTI crude oil is trading $70.16, up $0.20 or +0.29%.

Earlier in the session, crude oil dipped as traders continued to react to yesterday’s EIA report that showed another build in gasoline stocks. However, the market was able to recover from the early setback on the back of stronger-than-expected inflation data and as unemployment claims fell to their lowest since the pandemic began last March.

Prices plunged at the mid-session after media reports suggested the United States lifted sanctions on Iranian oil officials, but traders shook off that news and the market strengthened into the close.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at $70.65 will signal a resumption of the uptrend.

The main trend will change to down on a move through $61.56. This is highly unlikely, but due to the prolonged move in terms of price and time, the market may be ripe for a potentially bearish closing price reversal top.

The minor trend is also up. A trade through $68.47 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is $68.47 to $70.65. Its 50% level at $69.56 is potential support.

The second minor range is $65.25 to $70.65. If the minor trend changes to down then look for the selling to possibly extend into $67.95 to $67.31.

Short-Term Outlook

The price action the past three sessions suggests there is some selling pressure, but not enough to offset the buyers yet.

A higher-high, lower-close will be the first sign that the selling is greater than the buying at current price levels. This won’t change the main trend to down, but it could trigger the start of a 2 to 3 day correction into the minor retracement zones.