Crude Oil Price Update – Trend Changes to Up on Move Through $67.03

August West Texas Intermediate crude oil futures are trading higher on short-covering and position-squaring ahead of the start of the 2-day OPEC meeting in Vienna. Due to the uncertainty over the outcome of the meeting, most major players are sitting on the sidelines today.

A consensus of traders believe that OPEC and Russia will increase output. However, they may face opposition from Iran, Iraq and Venezuela. There is uncertainty over the outcome of the meeting with traders unsure about the amount or the timing of the increase. Traders are looking for an increase in output of 450,000 to 1 million barrels per day.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through $67.03 will change the main trend to up. A move through $63.40 will signal a resumption of the downtrend.

The minor trend is up. It turned up earlier in the session when buyers took out $66.35. The new minor bottom is $64.34. Momentum will shift to down on a move through this level.

Support is a long-term 50% level at $64.67.

The main range is $72.70 to $63.40. The first target is its retracement zone at $68.05 to $69.15. This is followed by a long-term Fibonacci level at $70.51.

Daily Technical Forecast

Based on the early trade, the direction of the crude oil market today is likely to be determined by trader reaction to the minor top at $66.35.

A sustained move over $66.35 will indicate the presence of buyers. If this generates enough upside momentum then look for a rally into the main top at $67.03. Taking out this top will change the main trend to up. This should lead to a test of the downtrending Gann angle at $67.20.

Overcoming $67.20 will indicate the buying is getting stronger with $68.05 to $69.15 the next major upside target. Crossing to the strong side of this zone could trigger an even further rally into $69.95 then $70.51.

A failure to hold $66.35 will indicate the buying is getting weaker or the selling is getting stronger. This could trigger a hard break into the support cluster at $64.82 to $65.67.

Breaking $65.67 will mean the selling is getting stronger with a minor target at $64.34, and major targets at 63.40 and $63.12.

Look for prices to collapse into $61.43 if $63.12 fails to hold.