September West Texas Intermediate crude oil futures are trading higher after the early session close as investors await the release of the weekly storage report from the American Petroleum Institute at 0830 GMT. Traders are looking for a drop in inventories of about 3.4 million barrels.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through $70.43 will change the main trend to up. A move through $66.92 will signal a resumption of the uptrend.
The market is posting an inside move on Tuesday which tends to indicate investor indecision and impending volatility.
The main range is $62.99 to $72.98. Its retracement zone at $67.99 to $66.81 is support. This zone stopped the selling late last week at $66.92.
The short-term range is $72.98 to $66.29. Its retracement zone at $69.64 to $70.42 is resistance. This zone stopped the rally on July 30 at $70.43.
Currently, September WTI crude oil is trading inside the two retracement zones. The longer the market remains inside this range, the bigger the breakout.
Daily Technical Forecast
Based on Tuesday’s price action, the direction of the September WTI crude oil futures contract into the close is likely to be determined by trader reaction to the 50% level at $69.64.
A sustained move under $69.64 will indicate the presence of sellers. If this move gains momentum, we could see a break into the next uptrending Gann angle at $68.42.
We could see a technical bounce on the first test of $68.42 but if it fails then look for a further decline into the 50% level at $67.99, followed closely by the uptrending Gann angle at $67.67.
Overtaking and sustaining a move over $69.64 will signal the presence of buyers. This could trigger a spike into a resistance cluster at $70.42, $70.43 and $70.48. Since the trend is down, look for sellers on the first test of this area. However, look for an acceleration to the upside if $70.48 is taken out with rising volume. This could trigger a move into the next downtrending Gann angle at $71.73.