Crude Oil Price Update – Upside Momentum May Be Building for Surge into $39.83, But Has to Hold $38.74
U.S. West Texas Intermediate (WTI) crude oil futures are inching lower on Thursday but remain near a two-week high as investors express doubts over whether there will be a huge stimulus package to bolster the economy in the face of rising coronavirus cases that threaten to derail the demand recovery.
At 15:19 GMT, December WTI crude oil futures are trading $39.23, up $0.08 or +0.20%.
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WTI crude oil futures are also being underpinned by growing expectations that OPEC and its allies, would hold off on bringing back 2 million bpd of supply in January, given demand has been sapped by new COVID-19 lockdowns.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of the closing price reversal bottom on November 2 and its subsequent confirmation the next day.
The main trend will change to up on a move through the nearest main top at $41.90. A move through $33.64 will signal a resumption of the downtrend.
The short-term range is $41.90 to $33.64. Its retracement zone is $37.77 to $38.74. The market is currently trading on the strong side of this area, putting it in a bullish position. This area is new support.
Additional support is a minor pivot at $36.45 and a major 50% level at $34.82.
Daily Swing Chart Technical Forecast
The early price action indicates the direction of the December WTI crude oil futures market into the close is likely to be determined by trader reaction to the short-term Fibonacci level at $38.74.
Bullish Scenario
A sustained move over $38.74 will indicate the presence of buyers. The next upside target is the minor top at $39.83. Taking out this level will change the minor trend to up. This could trigger a near-term acceleration to the upside with the main top at $41.90 the next major upside target.
Bearish Scenario
A sustained move under $38.74 will signal the presence of sellers. This could trigger a break into the 50% level at $37.77. This is a potential trigger point for an acceleration to the downside.
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