U.S. West Texas Intermediate crude oil futures are trading sharply higher late Tuesday after President Trump said he would hold an extensive meeting with Chinese President Xi Jinping at the G-20 summit in Japan later this month.
“Had a very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting,” Trump tweeted.
Some traders are treating the news as a rumor since China has not confirmed a meeting would take place. It they do confirm then the market could extend its stellar gains.
Later today, traders will get a chance to react to the latest weekly inventories report from the American Petroleum Institute. Traders are looking for a 1.5 million barrel draw down.
At 17:07 GMT, August WTI crude oil futures are trading $53.94, up $1.77 or +3.41%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through $54.99 will change the main trend to up. A move through $50.98 and $50.79 will signal a resumption of the downtrend.
The short-term range is $50.79 to $54.99. Its retracement zone at $52.89 to $52.39 is controlling the direction of the market. This zone is new support.
The main range is $64.03 to $50.79. If the trend changes to up then its retracement zone at $57.41 to $58.97 will become the primary upside target.
Daily Technical Forecast
Based on the early price action and the current price at $53.94, the direction of the August WTI crude oil futures contract the rest of the session is likely to be determined by trader reaction to the downtrending Gann angle at $54.03.
A sustained move over $54.03 will indicate the presence of buyers. If this move generates enough upside momentum then look for a possible test of the main top at $54.99. Taking out this level will change the main trend to up. This could trigger an eventual rally into the 50% level at $57.41.
A sustained move under $54.03 will signal the presence of sellers. This could lead to a labored break into a series of potential support levels at $53.04, $52.89, $52.39 and $51.92.
The current set up indicates two breakouts to the upside are possible if buyers come in strong. The first breakout price is $54.03, followed by $54.99.
This article was originally posted on FX Empire