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Crude Oil Price Update – Weekly Chart Indicates Strength Over $55.32, Weakness Under $52.70

By:
James Hyerczyk
Published: Jun 10, 2019, 04:43 UTC

Based on last week’s closing price reversal bottom and the close at $53.99, the direction of the July WTI crude oil market this week is likely to be determined by trader reaction to last week’s high at $54.63.

Crude Oil Price Update – Weekly Chart Indicates Strength Over $55.32, Weakness Under $52.70

U.S. West Texas Intermediate crude oil futures posted a potentially bullish weekly closing price reversal bottom after hitting its lowest level since the week-ending January 11 earlier in the week. The selling was fueled by another sharp rise in U.S. stockpiles and concerns over future demand due to global economic weakness.

Last week, July WTI crude oil futures settled at $53.99, up $0.49 or +0.92%.

The market turned around late in the week after Saudi Arabia said OPEC and its allies would likely extend the current strategy to cut production, trim inventory and stabilize prices beyond June.

Late Friday, the U.S. announced a deal with Mexico over immigration. This means there will be no tariffs implemented on June 10. This is potentially friendly for crude oil prices because it may alleviate some of uncertainty over the strength of the economy.

WTI Crude Oil
Weekly July WTI Crude Oil

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. However, momentum may have shifted to the upside following the formation of a closing price reversal bottom. If this chart pattern is confirmed, we could see the start of a 2 to 3 week counter-trend rally.

A trade through $50.60 will negate the chart pattern and signal a resumption of the downtrend.

The minor range is $44.20 to $66.44. The market is currently testing its retracement zone at $55.32 to $52.70. This zone is controlling the short-term direction of the market.

The main range is $75.20 to $44.20. If the counter-trend rally picks up traction then look for the move to extend into its retracement zone at $59.70 to $63.36.

Weekly Technical Forecast

Based on last week’s closing price reversal bottom and the close at $53.99, the direction of the July WTI crude oil market this week is likely to be determined by trader reaction to last week’s high at $54.63.

Bullish Scenario

Taking out $54.63 will confirm the weekly closing price reversal bottom. This could lead to a test of the minor 50% level at $55.32. This could lead to a labored rally with targets an uptrending Gann angle at $56.20 and a downtrending Gann angle at $57.20. The latter is a potential trigger point for an acceleration into the next downtrending Gann angle at $59.44. The main objective is the 50% level at $59.70.

Bearish Scenario

A sustained move under $54.63 will signal the presence of sellers. It will also mean traders are failing to recognize the importance of last week’s closing price reversal bottom.

Increased selling pressure could lead to a test of the minor Fibonacci level at $52.70. If this fails then look for the selling to extend into last week’s low at $50.60, followed by an uptrending Gann angle at $50.20.

The downside moment could increase under $50.20 with the next target angle coming in at $47.20. This is the last uptrending Gann angle support before the $44.20 main bottom.

About the Author

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.

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