US West Texas Intermediate crude oil futures are trading lower on Monday, putting the market in a position to form a potentially bearish closing price reversal top, which could trigger the start of a minimum 2 to 3 day correction.
The catalysts behind the selling pressure are the prospect of higher Iranian exports and psychological resistance at $70.00.
At 09:55 GMT, July WTI crude oil is trading $69.19, down $0.43 or -0.62%. This is down from an intraday high of $70.00.
Helping to dampen concerns over renewed negotiations between the US and Iran that could lead to increased supply are increased demand expectations due to the reopening of US and European economies.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through the intraday high of $70.00 will signal a resumption of the uptrend.
A trade through $61.56 will change the main trend to down.
This is highly unlikely, however, due to the prolonged move up in terms of price and time, the market is ripe for a closing price reversal top. If confirmed, this would change the main trend to down, but it will shift momentum for at least 2 to 3 days.
The minor trend is also up. A trade through $65.25 will change the minor trend to down. This will also indicate a shift in momentum.
The minor range is $65.25 to $70.00. Its retracement zone at $67.63 to $67.06 is the first downside target.
The main range is $61.56 to $70.00. Its retracement zone at $65.78 to $64.78 is the second downside target.