U.S. West Texas Intermediate crude oil futures are trading higher, but well off its high, shortly before the release of the American Petroleum Institute’s (API) weekly inventories report at 20:30 GMT on Tuesday. According to preliminary estimates, U.S. crude oil inventories were seen falling last week, while distillate and gasoline stocks likely rose slightly.
At 20:14 GMT, May WTI crude oil futures are trading $59.43, up $0.78 or +1.33%. This is down from a high of $60.90.
Prices rose earlier in the session as investors looked for bargains following the previous day’s plunge on rising output from OPEC+, while strong economic data from the United States and China brightened recovery prospects.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $57.25 will reaffirm the downtrend.
The minor trend is also down. A trade through $61.75 will change the minor trend to up. This will also shift momentum to the upside. The move will be reaffirmed if buyers can take out the next minor top at $62.27.
A trade through $57.63 will indicate the selling is getting stronger, while taking out $57.25 will reaffirm the minor trend.
The main range is $51.37 to $67.79. May WTI crude oil futures are currently testing its retracement zone at $59.58 to $57.64. This zone is controlling the near-term direction of the market.
On the upside, resistance is a series of retracement zone levels at $61.85, $62.52 and $63.76.
The direction of the May WTI crude oil market into the close will be determined by trader reaction to $59.58.
A sustained move under $59.58 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into a potential support cluster at $57.63, $57.64, $57.25 and $57.06.
A sustained move over $59.58 will signal the presence of buyers. This is a potential trigger point for an acceleration into a potential resistance cluster at $61.75, $61.85, $62.27 and $62.52.
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This article was originally posted on FX Empire