Crude Oil Price Update – Bullish as Long as Major Fibonacci Level at $70.86 Continues to Hold
U.S. WTI crude oil futures retreated on Wednesday, pressured by slightly bearish data from the U.S. Energy Information Administration (EIA). There wasn’t any real damage done to the bullish chart pattern with most traders paying more attention to the prospect of tighter markets due to U.S. sanctions against major crude exporter Iran rather than the government inventories report.
On Wednesday, November WTI crude oil settled at $71.57, down $0.71 or -0.99%.
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Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through $72.78 will signal a resumption of the uptrend. The main trend will change to down on a move through $67.79. Due to the prolonged move up in terms of price and time, today’s session begins with the market in the window of time for a potentially bearish closing price reversal top.
The minor trend is also up. A trade through $71.47 will change the minor trend to down. This will also signal a shift in momentum to down.
The market is also being supported by a series of retracement levels.
The minor range is $69.98 to $72.78. Its 50% level or pivot is $71.38. This zone is controlling the direction of the market early Thursday.
The next support level is the major Fibonacci level at $70.86.
The main range is $67.79 to $72.78. If $70.86 is violated then look for the selling to continue into its retracement zone at $70.33 to $69.74.
Daily Swing Chart Technical Forecast
Based on yesterday’s close at $71.57 and the early price action, the direction of the November WTI crude oil futures contract is likely to be determined by trader reaction to the pivot at $71.38.
A sustained move over $71.38 will indicate the presence of buyers. If this creates enough upside momentum then buyers may take a run at $72.78. Overtaking this top will indicate the buying is getting stronger.
A sustained move under $71.38 will signal the presence of sellers. Taking out this level should trigger a quick break into $70.86. Watch for buyers to come in and vigorously support this level.
If $70.86 fails then look for the selling pressure to increase into $70.33 to $69.74. The daily chart starts to open up to the downside under $69.74.