- U.S. WTI crude oil futures fall after Monday’s reversal bottom
- Monday saw a 1% rise in oil prices from 15-month low
- Fed’s decision on rate hikes causing market uncertainty and potential volatility
U.S. West Texas Intermediate crude oil futures are edging lower Tuesday after giving back earlier gains. This followed the confirmation of Monday’s closing price reversal bottom. The price action suggests a shift in momentum, but it’s going to take some time to form a support base strong enough to change the main trend to up.
At 02:37 GMT, June WTI Crude Oil is trading $67.33, down $0.66 or -0.97%. On Monday, the United States Oil Fund ETF (USO) settled at $59.79, up $1.13 or +1.93%.
On Monday, oil prices increased by more than 1% after reaching their lowest point in 15 months. The market had concerns that risks in the global banking sector could lead to a recession that would decrease fuel demand.
Oil prices were lifted off session lows by gains in the S&P 500 and the Dow Jones, as traders bet that the Fed will pause on rate hikes on Wednesday to prevent bank sector troubles from snowballing. The Fed’s decision is adding to the uncertainty in the markets, and some executives are calling for a pause in monetary policy tightening. ING Bank analysts predict that volatility will likely persist this week.
Daily June WTI Crude Oil Technical Analysis
The main trend is down according to the daily swing chart. However, momentum may have shifted to the upside, following the confirmation of Monday’s closing price reversal bottom. A trade through $64.58 will signal a resumption of the downtrend. A move through $80.97 will change the main trend to up.
The minor trend is also down. A trade through $69.94 will change the minor trend to up. This will confirm the shift in momentum.
The minor range is $69.94 to $64.58. The market is currently testing its pivot at $67.26.
The closest resistance is a long-term 50% level at $68.76 and a short-term 50% level at $71.08.
Daily June WTI Crude Oil Technical Forecast
Trader reaction to the minor pivot at $67.26 is likely to determine the direction of the June WTI crude oil futures contract on Tuesday.
A sustained move over $67.26 will indicate the presence of buyers. The first upside target is $68.76, followed by the minor top at $69.94.
Taking out $69.94 will change the minor trend to up and could generate the upside momentum needed to challenge a retracement zone at $71.08 – $73.05.
A sustained move under $67.26 will signal the presence of sellers. This could trigger a sharp break into $64.58. If this level fails as support then look for the selling to possibly extend into the long-term Fibonacci level at $61.27.For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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