WTI Crude Continues To Tighten - Forex News by FX Leaders

For the past nine sessions, June WTI crude oil futures have traded in tight daily ranges near $64.00. Energy bulls and bears have fought to a stalemate, with each side wondering when the other will relent. After such a prolonged cycle of market compression, one is inclined to believe that a major market move is headed our way.

Due to the observance of Good Friday, the Baker Hughes Rig Count will be released a day early (today, 1:00 PM EST). Last week’s figure came in at 833, up two rigs from the previous week. Given the seasonality of crude oil production in North America, I expect this week’s Baker Hughes report to show another increase in drill rigs.

June WTI Futures Tighten Near $64.00

Today’s range in June WTI crude oil futures is an extremely tight 69 ticks. Price is in heavy consolidation just north of $63.50.

June WTI Crude Oil Futures (CL), Daily Chart
June WTI Crude Oil Futures (CL), Daily Chart

Here are the levels to watch in this market for the near future:

  • Resistance(1): Psyche Level, $65.00
  • Support(1): 38% Current Wave, $62.31
  • Support(2): Bollinger MP, $62.01

Bottom Line: Going into the holiday weekend, it appears as though WTI is content to settle between $63.50 and $64.25. If this holds through today’s close, a buying opportunity may set up for coming sessions.

Until elected, I will have buy orders queued up from just above the 38% Current Wave Retracement at $62.36. With an initial stop at $61.88, this trade produces 48 ticks on a 1:1 risk vs reward management plan.

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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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