After a failed auction beneath Friday’s low, WTI crude oil has posted significant gains on the session. At press time, July WTI futures are trading slightly above the $66.00 handle. It appears that the key Fibonacci technical level of $65.92 is attracting heavy two-way action.

With the weekly inventory cycle due to kick off tomorrow, there is an ongoing debate over standing crude oil supplies. Many traders are anticipating increasing supply for the remainder of 2018, while others are respecting a long-term view of scarcity. Either way, crude oil is trading at a make-or-break technical level on the daily time frame.

WTI Crude Oil Technicals

Technically, WTI crude remains in a downtrend. The daily chart shows us just that — a selloff, followed by a retracement, and subsequent trend continuation.

Here the levels to watch for the remainder of the session:

• Resistance(1): Bollinger MP, $67.45
• Resistance(2): Daily SMA, $70.29
• Support(1): 38% Current Wave, $65.92
• Support(2): Round Number, $65.00

Overview: The price action in WTI crude has been positive, although the traded volumes are moderate. With only 400,000 contracts trading hands, interest is not huge ahead of the coming U.S./North Korea summit. It appears many traders are sitting this session out amid a charged news cycle.

WTI crude may have put in a short-term bottom. If we see a close above $66.00, then a test of topside resistance on the daily time frame is probable. For now, taking a wait-and-see approach is wise given the geopolitical atmosphere.