Crude Oil Price Update – Needs to Build Support Over $56.65 to Extend Rally
U.S. West Texas Intermediate crude oil futures are trading higher on Thursday. The market is being underpinned by the OPEC-led production cuts, the U.S. sanctions on Iran and Venezuela, and a U.S. government report, which showed a bigger-than-expected drop in gasoline inventories.
Helping to keep a lid on prices is rising U.S. production, and forecasts for lower demand due to a slowing global economy. Uncertainty over the timing and content of a U.S.-China trade deal is also making investors nervous.
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At 13:43 GMT, April WTI crude oil is trading $56.82, up $0.60 or +1.05%.
Daily Technical Analysis
The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top on March 1.
A trade through $57.88 will signal a resumption of the uptrend. The main trend will change to down on a trade through $55.02.
The minor trend is also up. A trade through $55.42 will change the minor trend to down. This will confirm the shift in momentum.
The short-term range is $57.88 to $55.42. Its 50% level or pivot is $56.65.
The main range is $51.62 to $57.88. If the trend changes to down then look for a test of its retracement zone at $54.72 to $53.98.
Daily Technical Forecast
Based on the early price action, the direction of the April WTI crude oil market the rest of the session is likely to be determined by trader reaction to the pivot at $56.65.
Bullish Scenario
A sustained move over $56.65 will indicate the presence of buyers. The first target is a downtrending Gann angle at $56.88. Overtaking this angle will indicate the buying is getting stronger with the next two target angles coming in at $57.38 and $57.63. The latter is the last potential resistance angle before the $57.88 main top.
Bearish Scenario
A sustained move under $56.65 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the support cluster at $55.88 to $55.87. Taking out $55.87 will likely lead to a test of the minor bottom at $55.42.