U.S. West Texas Intermediate crude oil futures are trading slightly lower early Thursday and in an extremely tight range on low volume. The market became a little trickier to trade on Wednesday with the news that Russia and Saudi Arabia had agreed to increase production in September in the hopes of stabilizing prices.
Furthermore, traders are also beginning to worry about demand now that Brent has breached the $80.00 level. Complicating matters is the strong U.S. Dollar which is making dollar-denominated crude oil very expensive for emerging market countries.
At 1200 GMT, November WTI crude oil is trading $76.22, down $0.20 or -0.26%.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through $76.90 will signal a resumption of the uptrend. The main trend is in no position to turn down, but due to the prolonged move up in terms of price and time, it is in a position to form a closing price reversal top.
The minor trend is also up. A trade through $74.30 will change the minor trend to down. This will also shift momentum to the downside.
The first minor range is $74.30 to $76.90. Its 50% level or pivot at $75.60 is controlling today’s price action.
The second minor range is $71.47 to $76.90. Its 50% level or pivot at $74.19 is the next target.
The main range is $67.79 to $76.90. If the minor trend changes to down then look for the selling pressure to drive the market into the retracement zone at $72.35 to $70.86. This is a value zone.
Daily Technical Forecast
Based on the early price action, the direction of the November WTI crude oil market today is likely to be determined by trader reaction to the pivot at $75.60.
A sustained move over $75.60 will indicate the presence of buyers. If this creates enough upside momentum then look for a potential breakout over $76.90.
A sustained move under $75.60 will signal the presence of sellers. The next target is a steep uptrending Gann angle at $74.79. This angle stopped the selling on Wednesday.
Taking out $74.79 will indicate the selling is getting stronger. This could drive the market into the minor bottom at $74.30, followed by another pivot at $74.19. The latter is the trigger point for an acceleration to the downside with the next target the main 50% level at $72.35.