U.S. West Texas Intermediate crude oil futures are edging higher for a second session early Monday as speculators bet that a storm in the Gulf of Mexico will lead to supply disruptions. Reuters is also reporting that Iran said a three-month nuclear monitoring deal had expired, raising doubts about the future of indirect talks that could end U.S. sanctions on Iranian crude exports.
At 12:38 GMT, July WTI crude oil futures are trading $64.41, up $0.83 or +1.31%.
Last week, prices fell on reports that the U.S. and Iran were close to making a nuclear deal that would lead to the lifting of U.S. sanctions on Iranian crude exports, a move that would increase supply. Today, the market is clawing back some of those losses
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. However, momentum.
has shifted to the upside with the confirmation of Friday’s closing price reversal bottom.
The main trend will change to up on a move through $67.02. Taking out $61.56 will negate the closing price reversal bottom and signal a resumption of the downtrend.
The main range is $57.18 to $67.02. Its retracement zone at $62.10 to $60.94 is support. This zone stopped the selling last week at $61.56.
The short-term range is $60.55 to $67.02. The market is currently trading on the strong side of its retracement zone at $63.79 to $63.02, making it support.
The minor range is $67.02 to $61.56. Its retracement zone at $64.29 to $64.94 is the primary upside target. Trader reaction to this zone should set the near-term tone.
Daily Swing Chart Technical Forecast
The direction of the July WTI crude oil futures contract on Monday is likely to be determined by trader reaction to $64.29.
A sustained move over $64.29 will indicate the presence of buyers. This could create the upside momentum needed to challenge the Fibonacci level at $64.94. This is the trigger point for a potential acceleration to the upside with $67.02 the next target.
A sustained move under $64.29 will signal the presence of sellers. This could lead to a labored break with potential downside coming in at $63.79 and $63.02. The latter is a potential trigger point for an acceleration to the downside into a major retracement zone at $62.10 to $60.94.
Watch the price action and read the order flow on a test of $64.29 to $64.94. Sellers will be trying to establish a new secondary lower top, while aggressive counter-trend buyers will be trying to blast through the zone.