Crude Oil Price Update – Going to Need Strong Upside Momentum to Sustain Rally
U.S. crude oil futures settled higher on Friday, supported by a drop in Libyan production and positive comments from Saudi Arabia that validated the OPEC-led plan to cut production, trim the global supply glut and stabilize prices.
April West Texas Intermediate crude oil futures settled at $63.55, up $0.78 or +1.24%.
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Daily Technical Analysis
The main trend is up according to the daily swing chart. The trend turned up on Thursday. The next swing chart target is the February 2 top at $66.00. A trade through $60.75 will change the main trend to down.
The main range is $66.00 to $57.90. Closing above its retracement zone at $62.91 to $61.95 is also helping to give the market an upside bias. This zone is new support.
Crude oil is also trading on the strong side of a longer-term retracement zone at $61.20 to $59.98. This zone is also support.
Daily Technical Forecast
Strong momentum into the close on Friday indicates the presence of buyers. This could carry over to Monday’s early trade.
Based on Friday’s price action, the direction of the April WTI futures contract is likely to be determined by trader reaction to the Fibonacci level at $62.91.
A sustained move over $62.91 will indicate that buyers are coming in to support the uptrend. This could create the upside momentum needed to challenge the downtrending Gann angle at $64.25. We could see a technical bounce on the first test of this angle. It is also the trigger point for an acceleration to the upside with the next target angle coming in at $65.13. This is the last potential resistance angle before the $66.00 main top.
Look for a labored break if $62.91 fails as support. Potential support levels are layered at $62.40, $61.95 and $61.75.
Now that we’re trading on the strong side of the major retracement zone at $62.91 to $61.95, the next move is going to be all about sustaining the current upside momentum.