Current trend

The price of WTI Crude Oil started this week with a decline to the 68.80 region but by now it has regained some of the lost positions and is trading at 69.90, being influenced by two factors: political tensions in Russia and the approaching Independence Day in the United States.

The actions of the Russian private military company Wagner, taken over the weekend, caused investors to fear interruptions in the oil supply from one of the world’s leading producers but the short duration of the events did not allow the asset to significantly strengthen, moreover, experts are counting on an increase in energy consumption in the United States. The holiday weekend has traditionally seen an increase in tourist activity, and the American Automobile Association estimates that 43.0M citizens will make long-distance trips in July, up 4.0% from 2019, before the start of the coronavirus pandemic.

Growth in energy demand in the first world economy in the short term may support oil prices but global negative factors associated with the poor growth of the Chinese economy after its recovery from the crisis and the risks of a recession in the United States remain dominant in the market.

Support and resistance

The price is forming a downward Triangle pattern, reaching its upper border at 72.70 last week, after which the decline resumed to 67.30 (lower border of the formation) and 64.60 (100.0% Fibonacci retracement). The key “bullish” level is 71.88 (Murrey’s level [3/8]), consolidation above which will give the prospect of resumption of growth to 75.00 (Murrey’s level [4/8]) and 78.12 (Murrey’s level [5/8]).

Technical indicators do not give a single signal: Bollinger bands are reversing downwards, and the MACD histogram is stable in the negative zone but Stochastic is trying to reverse upwards.

Resistance levels: 71.88, 75.00, 78.12.

Support levels: 67.30, 64.60, 62.50.

Trading tips

Short positions may be opened below 69.00 with the targets at 67.30, 64.60 and stop loss around 70.40. Implementation period: 5–7 days.

Long positions may be opened above 71.88 with the targets at 75.00, 78.12 and stop loss around 70.50.