US West Texas Intermediate crude is trading at a multi-year high late Friday night, giving the market the opportunity to post its third straight weekly gain. The catalysts driving the market upward are expectations of stronger global demand, rapidly rising vaccination levels and the resumption of major economies.
At 18:13 GMT, July WTI crude is worth $ 71.18, up $ 0.89, or + 1.27%. Rollover for the August futures contract on Monday.
In other news, US investment bank Goldman Sachs said it expects Brent crude prices to rise to $ 80 a barrel this summer as the introduction of the vaccine will boost global economic activity.
Finally, in a sign of future supply, the number of oil rigs in the U.S. jumped six to 365 this week to its highest level since April 2020, energy company Baker Hughes Co. said in a weekly report. This was the largest weekly increase in the number of oil rigs in a month, Reuters reported.
Technical Analysis of Daily Swing Charts
According to the daily fluctuation chart, the main trend is up. Trading through the intraday high at $ 71.24 confirms the uptrend.
A move through $ 61.56 will change the main trend to a downtrend. This is unlikely, but since the market has rallied 14 sessions from its last major bottom, it is currently trading within a time window for a potentially bearish closing price reversal top.
A close below $ 70.29 will form the top of the daily closing price reversal. If confirmed, this could trigger the onset of a 2-3-day correction.
The minor trend is also upward. A trade up to $ 68.68 would change the minor trend to a downtrend. This will also reverse the momentum.
The first minor range is $ 68.47 to $ 71.24. Its 50% level at $ 69.86 is potential support.
The second minor range is $ 65.25 to $ 71.24. If the insignificant trend changes to a downtrend, look for sales to possibly reach a recovery zone between $ 68.25 and $ 67.24. Since the main trend is upward, buyers are likely to enter the first test of this zone.
Daily Swing Chart Technical Forecast
The direction of the July WTI crude oil market towards the close on Friday is likely to be determined by the trader’s reaction at $ 70.29.
A sustained move above $ 70.29 will indicate the presence of buyers. Reaching an intraday high of $ 71.24 would indicate stronger buying.
A sustained move below $ 70.29 will signal the presence of sellers. If this creates sufficient downside momentum, look for a pullback to the pivot point at $ 69.86. Look for buyers on the first test of this level.
The reversal at $ 69.86 is also a trigger for accelerating downward movement, with the next target values clustered at $ 68.68, $ 68.47 and $ 68.25.
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This article was originally posted on FX Empire