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Crude Oil Price Update – Weekly Retracement Zones Controlling Price Action

By:
James Hyerczyk
Updated: Aug 13, 2018, 03:26 UTC

Based on last week’s close at $66.94, the direction of the October WTI crude oil futures contract this week is likely to be determined by trader reaction to the short-term 50% level at $66.95. Longer-term, WTI crude oil strengthens over $69.19 and weakens under $65.20.

Crude Oil

U.S. West Texas Intermediate crude oil futures settled lower last week, but remained inside its six-week range. There were some fireworks to the downside mid-week after China retaliated against U.S. tariffs with sanctions of their own on U.S. petroleum products. This raised issues about demand. A slowdown in China’s economy also created concerns over demand.

For the week, October WTI crude oil futures settled at $66.94, down $0.41 or -0.61%.

Traders also had to deal with supply concerns due to sanctions against Iran. Late in the week, the International Energy Agency helped provide support by saying the calm in the market will not last because of the fragile supply situation.

WTI Crude Oil
Weekly October WTI Crude Oil

Weekly Swing Chart Technical Analysis

The main trend is up according to the weekly swing chart. However, momentum is has been sideways for six weeks, or since the possible secondary lower top at $71.29, the week-ending June 29.

A trade through $71.63 will signal a resumption of the uptrend. A move through $62.60 will change the main trend to down.

The price action is also being controlled by a pair of retracement zones. $68.25 to $68.96 is providing resistance and $66.95 to $65.92 is providing support.

The main range is $54.74 to $71.63. Its retracement zone at $63.19 to $61.19 is the major support. This zone stopped the selling at $62.60 the week-ending June 22.

WTI Crude Oil (Close-Up)
Weekly October WTI Crude Oil (Close-Up)

Weekly Swing Chart Technical Forecast

Based on last week’s close at $66.94, the direction of the October WTI crude oil futures contract this week is likely to be determined by trader reaction to the short-term 50% level at $66.95.

A sustained move over $66.95 will indicate the presence of buyers. This could trigger a rally into $68.25 to $69.96. However, the trigger point for a breakout to the upside could be $69.19.

A sustained move under $66.95 will signal the presence of sellers. This could trigger a fast break into $65.92. The trigger point for an acceleration to the downside is the minor bottom at $65.20. The next target under this level is $63.19.

Longer-term, WTI crude oil strengthens over $69.19 and weakens under $65.20.

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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