Based on the momentum into the close on Friday and the closing price reversal top chart pattern, the direction of the July WTI Crude Oil market this week is likely to be determined by trader reaction to last week’s low at $67.42.
Crude oil fell sharply last week after reports said that Saudi Arabia, Russia and other major non-OPEC producers were preparing to increase production gradually starting in June. In other news, according to Baker Hughes, U.S. producers increased the number of producing rigs.
Weekly Swing Chart Technical Analysis
The main trend is up according to the weekly swing chart, however, momentum shifted to the downside with the formation of a potentially bearish closing price reversal top. This chart pattern doesn’t mean the trend is getting ready to turn down, but it could lead to a 2 to 3 week correction equal to 50% to 61.8% of the last rally.
The contract retracement zone is $64.77 to $70.60. The market is currently trading inside this zone. This zone is controlling the longer-term direction of the market.
The short-term range is $55.45 to $72.90. Its retracement zone at $63.77 to $61.81 is the primary downside target. Since the main trend is up, we could see a technical bounce on the first test of this zone if buyers return.
The main range is $44.98 to $72.90. If the selling pressure strengthens on a move through $61.81 then look for the selling to possible extend into its retracement zone at $58.94 to $55.65.
Weekly Swing Chart Technical Forecast
Based on the momentum into the close on Friday and the closing price reversal top chart pattern, the direction of the July WTI Crude Oil market this week is likely to be determined by trader reaction to last week’s low at $67.42.
Taking out $67.42 will confirm the closing price reversal top chart pattern. This could trigger the downside momentum needed to challenge the major 50% level at $64.77, followed by the short-term retracement zone at $63.77 to $61.81.
Holding above $67.42 or regaining this level after an early breakdown will signal the presence of buyers. This could lead to a retracement of the break from last week’s high at $72.90.
