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Crude Oil Technical Outlook for the Day: Price at Key Near-Term Support

The brief return of risk-on sentiment into the financial markets yesterday as well as pessimistic comments from the Iranian foreign minister on any further US-Iran talks outside revamping the abrogated nuclear deal served to push oil prices above the $56 mark. After finding resistance at 56.74, WTI crude oil has retreated to the 56.02 price level, just above the central pivot of 55.80. An ascending support trendline is also helping support the price action.

The volume profile indicator also indicates that the highest trading volumes for the day are being seen at the current price levels. This would add to the narrative that expects crude oil prices to remain support at the central pivot area.

A downside break of 55.80 will invalidate any bullish bias for the day and will allow WTI crude oil to test the 55.23 support (S1 pivot). Maintenance of the support at 55.80 will allow for a bounce action that will permit crude oil to aim for the R1 pivot at 56.74 and possibly the August 13 high at 57.31.

Further direction for crude oil will come from this week’s version of the EIA Crude Oil Inventories report, scheduled for release at 2.30pm GMT tomorrow.

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