U.S crude oil futures closed lower on Friday, pressured by a stronger U.S. Dollar and concerns over increasing U.S. production. Last week, the Energy Information Administration reported that U.S. crude production jumped 215,000 barrels per day (bpd) to 10.47 million bpd, a new monthly record.
July West Texas Intermediate crude oil settled at $65.81, down $1.20 or -1.82%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. The downtrend was reaffirmed on Friday when sellers took out $65.80. The market is now down seven sessions from its last main top on May 22, which puts it in the window of time for a closing price reversal bottom.
The minor trend is also down. A trade through $68.67 will change the minor trend to up. This will also shift momentum to the upside.
The nearest resistance is a Fibonacci level at $66.00. This is followed by a 50% level at $67.32.
The first support is a price cluster at $64.92 to $64.77. We could see a technical bounce on the first test of this area if aggressive counter-trend buyers or profit-takers decide to show up. Look out to the downside if $64.77 fails. There’s run to break with $63.03 the next target.
Daily Swing Chart Technical Forecast
Based on Friday’s close at $65.81, the direction of the market on Monday is likely to be determined by trader reaction to the Fibonacci level at $66.00.
A sustained move under $66.00 will indicate the presence of sellers. This could drive the market into the support cluster at $64.92 to $64.77. This is a combination of a short-term 50% level and the contract’s 50% level. Aggressive counter-trend buyers could come in on a test of this area.
If $64.77 fails as support then look for an acceleration to the downside with $63.03 the next major target.
A sustained move over $66.00 will signal the presence of buyers. If this generates enough upside momentum then look for a move into the 50% level at $67.32. Since the trend is down, sellers could come in on a test of this level. Overtaking it will mean the buying is getting stronger with potential targets at $68.67 and $69.21.