U.S. West Texas Intermediate crude oil futures surged on Monday to their highest level since July 31, erasing all of August’s steep decline. Two catalysts drove the price action yesterday. The initial rally was fueled by hawkish comments from new Saudi energy minister Prince Abdulaziz bin Salman, who confirmed expectations that he would adhere with his country’s policy of limiting crude output to support prices.
On Monday, October WTI crude oil futures settled at $57.85, up $1.33 or +2.35%.
A second wave of buying came into the market after Israeli Prime Minister Benjamin Netanyahu raised concerns about a potential supply disruption. He said Monday that Iran has a secret nuclear facility and called for action against the Middle Eastern nation.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Monday when buyers took out last week’s high at $57.76. The nearest main bottom is $52.84.
The minor trend is also up. A trade through $54.83 will change the minor trend to down. This will also shift momentum to the downside.
The main range is $60.93 to $50.50. Its retracement zone at $56.95 to $55.72 is new support. Trading on the strong side of this area is helping to generate the upside bias.
Daily Swing Chart Technical Forecast
Obviously with the main trend up, buyers would like to continue to see higher-highs and higher-lows.
Taking out Monday’s high at $58.16 will signal the presence of buyers. If this can create enough upside momentum then look for a potential surge into the July 31 main top at $58.86. This is the last potential resistance level before the July 11 main top at $60.93.
A failure to follow-through to the upside won’t signal a top, but it could lead to a pullback into the main Fibonacci level at $56.95. With the main trend up, buyers are likely to come in on a test of this level. If it fails then the selling could possible extend into the main 50% level at $55.72.
The week starts with the fundamentals bullish. This time it’s concerns over the supply side driving the price action. Future demand growth is still questionable, but as long as the U.S. and China maintain their composure and follow-through with their scheduled trade talks in early October, traders shouldn’t be too worried about demand at this time.
This article was originally posted on FX Empire
More From FXEMPIRE:
- AUD/USD Forex Technical Analysis – Short-Sellers Defending Main 50% Level at .6880
- European Equities: Policy Uncertainty and Brexit to Test the Majors
- AUD/USD, NZD/USD, USD/CNY – Asian Session Daily Forecast
- Hot Crypto-Autumn: In The Search For a Bear
- Bitcoin Cash – ABC, Litecoin and Ripple Daily Analysis – 10/09/19
- EUR/USD is Targeting 1.0980-60 on a Break Below 1.1015.