Crude Oil Price Update – Upside Bias, but Labored Rally Likely

U.S. West Texas Intermediate crude oil futures are trading higher on Tuesday, the press says the market is being supported by optimism tied to the U.S. Federal Reserve’s widely expected interest rate cut on Wednesday. However, also contributing to the strength is expectations of another weekly drawdown in this week’s American Petroleum Institute (API) weekly inventories report at 20:30 GMT.

At 12:02 GMT, September WTI crude oil is trading $57.23, up $0.37 or +0.69%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The market isn’t close to turning the main trend to up, but it is in a position to shift momentum to the upside.

The minor trend is also down. A trade through $57.64 will change the minor trend to up. Momentum will shift to the upside on this move.

The minor range is $54.85 to $57.64. Its 50% level or pivot at $56.25 is the first support. The next support is the retracement zone at $55.62 to $54.50.

The short-term range is $61.02 to $54.85. Its retracement zone at $57.94 to $58.66 is the first upside target. Inside this zone is a major 50% level at $58.41.

Daily Technical Forecast

Based on the early price action and the current price at $57.23, the first target is the minor top at $57.64, followed by the downtrending Gann angle at $57.77 and the short-term 50% level at $57.94.

The 50% level at $57.94 is a potential trigger point for an acceleration into $58.41 to $58.66.

If sellers take control of the market then look for an intraday pullback. The first downside target is $56.25, followed by a support cluster at $55.62.

Overview

Even though there is an upside bias today, any rally is likely to be labored until the market clears $58.66.