Crude Oil Price Update – Approaching Major Value Zone at $46.52 to $45.57

October West Texas Intermediate Crude Oil is under pressure again on Thursday. Despite declining U.S. inventories, the price action suggests traders are worried about rising output and OPEC’s ability to control production.

Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $45.58 will change the main trend to down.

The main range is $42.52 to $50.51. Its retracement zone at $46.52 to $45.57 is the primary downside target. Since the main trend is up, buyers could show up on a test of the retracement zone.

Additionally, today’s session begins with the market in the window of time for a closing price reversal bottom. This is likely to occur if buyers successfully test the retracement zone.

Forecast

Based on the current price at $46.79 and the earlier price action, the direction of the market is likely to be determined by trader reaction to the uptrending angle at $46.71.

Holding above $46.71 will indicate that buyers are coming in to defend the uptrend. If they can create enough upside momentum then look for a quick rally into the downtrending angle at $47.51. This is the trigger point for a possible acceleration to the upside.

A failure to hold $46.71 will signal the presence of sellers. The first target is the major 50% level at $46.52. We could see an acceleration to the downside if this level fails as support. The next two downside targets are a long-term uptrending angle at $45.76, the main bottom at $47.58 and the major Fibonacci level at $45.57.

Watch the price action and read the order flow at $46.71. Trader reaction to this angle will determine the direction of the market the rest of the day.