Crude Oil Price Update – Momentum Shifts to Downside if $71.09 Fails as Support

July West Texas Intermediate crude oil is trading flat shortly after the U.S. opening. The lack of fresh news about the renewed U.S. sanctions against Iran and their potential impact on supply in the future seems to have slowed the upside momentum.

Bullish investors are also expressing concerns over rising U.S. production. Additionally, bearish traders feel that there is enough crude oil around to meet short-term demand. However, losses could be limited by worries over the economic turmoil in Venezuela.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $72.37 will signal a resumption of the uptrend. The main trend will change to down on a move through $70.24.

The minor trend is also up. A trade through $71.09 will change the minor trend to down.

The short-term range is $70.24 to $72.37. Its 50% level or pivot at $71.31 is controlling the price action.

The main range is $66.77 to $72.37. If the trend changes to down then look for a move into its retracement zone at $69.57 to $68.91.

Daily Swing Chart Technical Forecast

Based on the early trade, the direction of crude oil the rest of the session is likely to be determined by trader reaction to the short-term pivot at $71.31.

A sustained move over $71.31 will signal the presence of buyers. If this generates enough upside momentum, we could see a retest of $72.37.

A sustained move under $71.31 will indicate the presence of sellers. Look for a possible acceleration to the downside if $71.09 is taken out. This could trigger a break into a major Fib level at $70.60 then the main bottom at $70.24.

If $70.24 is taken out then the trend will change to down which could lead to a test of $69.57 to $68.91.