Crude Oil Price Update – Strengthens Over $61.17, Weakens Under $60.85 into Close
U.S. West Texas Intermediate crude oil futures are inching higher late Thursday, underpinned by yesterday’s friendly U.S. Energy Information Administration (EIA) and the hopes that the Phase One trade agreement between the United States and China will generate increased demand growth. Trading volume was extremely low, which curtailed the upside action. Nonetheless, the market remains in a position to post its third consecutive weekly gain.
At 19:28 GMT, February WTI crude oil futures are trading $61.20, up $0.35 or +0.56%.
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Daily Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out Wednesday’s. Taking out the intraday high at $61.40 later in the session will signal a resumption of the uptrend.
The main trend will change to down on a trade through $54.75. This is highly unlikely, but a close under $60.85 will form a potentially bearish closing price reversal top. This could trigger the start of a 2 to 3 correction.
The key support is the retracement zone at $58.66 to $57.06. This zone is helping to generate a strong upside bias.
Short-Term Outlook
February WTI crude oil is bumping into a downtrending Gann angle at $61.17. Overtaking this angle will indicate the buying is getting stronger. This could trigger an acceleration to the upside with the next downtrending Gann angle coming in at $62.52.
A failure to overcome the downtrending Gann angle at $61.17 will indicate the presence of sellers. If this move is able to generate enough downside momentum over the near-term then look for a potential pullback into the uptrending Gann angle at $59.75. The uptrending Gann angle has been guiding the market higher for 20 sessions.
Side Notes
Watch the price action and read the order flow on a test of $60.85 into the close. Finishing below this level will indicate the selling is greater than the buying at current price levels. This could trigger the start of a short-term correction.