U.S. West Texas Intermediate crude oil futures are trading higher early Tuesday, but slightly below the two-year high hit the previous session. The market is sitting inside yesterday’s range, suggesting investor indecision and impending volatility.
Bullish traders are banking on the prospect of extra supply coming to the market soon from Iran fading with talks dragging on over the United States rejoining a nuclear agreement with Tehran. Bearish traders are hoping a U.S. return to the deal would pave the way for the lifting of sanctions on Iran that would allow the OPEC member to resume exports of crude.
At 09:58 GMT, September WTI crude oil futures are trading $70.23, up $0.23 or +0.33%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through $70.68 will signal a resumption of the uptrend.
The main trend will change to down on a trade through $61.06. This is highly unlikely, but due to the prolonged move up in terms of price and time, traders should watch for a higher-high, lower-close chart pattern to signal that the selling is greater than the buying at current price levels. If confirmed, this could lead to a 2 to 3 day correction.
The minor trend is also up. A trade through $68.05 will change the minor trend to down. A move through $69.74 will turn $70.68 into a new minor top.
The first minor range is $68.05 to $70.68. Its 50% level at $69.37 is the nearest support level.
The second minor range is $64.60 to $70.68. Its 50% level at $67.64 is another potential support level.
Daily Swing Chart Technical Forecast
The direction of the September WTI crude oil market on Tuesday is likely to be determined by trader reaction to $70.21.
A sustained move over $70.21 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into $70.68. This is a potential trigger point for an acceleration to the upside. There is no objective at this time.
A sustained move under $70.21 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to extend into the first minor pivot at $69.37. Buyers could come in on the first test of this level. If it fails, the market could accelerate to the downside with potential downside targets coming in at $68.05, $67.84 and $67.64.