The recent pattern over the past seven to 10 days has been lower highs and lower lows, as the positive momentum appears to have temporarily subsided.
With that being said, the underlying direction trend in crude (NYMEX:CLn14) continues to favor the upside. Crude saw a strong rally in the overnight session heading into today’s trade, which could set the tone for the remainder of the session, as traders look forward to this morning’s EIA Petroleum Status report at 9:30 am CT.
Local levels of support can be seen at 103.12 and 102.97, followed by more significant support around 102.64.
If today’s report shorts a higher than anticipated build in inventories and traders see a subsequent sell-off below the 6/2 low, look for the 101.73 area to become relevant before the end of the week. However, if price action takes the lead from this morning's trade and continues higher, 103.66 and 103.92 appear to be valid near-term resistance levels, as well as potential profit-taking objectives for bullish day traders.