Crude Oil Price Update – Breaks Sharply on Hurricane-Caused Demand Concerns
Based on the early price action and the current price at $55.03, the direction of the October WTI crude oil futures contract into Friday’s close is likely to be determined by trader reaction to a pair of uptrending Gann angles at $54.96 and $54.75.
After posting an inside move for most of the session on Friday, U.S. West Texas Intermediate crude oil futures plunged at the mid-session. The price action demonstrates just how fragile this market is despite optimism over U.S.-China trade relations. Helping to prop up prices this week were bigger-than-expected draw downs in U.S. inventories, a sign that the OPEC-led production cuts are helping to reduce U.S. stockpiles. Traders are also saying that the hurricane headed toward the East Coast of Florida could dampen demand.
At 17:31 GMT, October WTI crude oil futures are trading $55.03, down $1.68 or -2.94%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through $57.13 will change the main trend to up. A move through $52.96 will signal a resumption of the downtrend.
Today’s price action made $56.89 a new minor top. Taking out this level will change the minor trend to up. This will also shift momentum to the upside.
The main range is $60.93 to $50.50. Its retracement zone at $55.72 to $56.95 is controlling the near-term direction of the market. The upper level of this range stopped rallies at $57.40, $57.13 and $56.89.
The short-term range is $50.50 to $57.40. Its retracement zone at $53.92 to $53.11 is support. The lower level of this range stopped the selling at $52.86 on August 26.
Daily Technical Forecast
Based on the early price action and the current price at $55.03, the direction of the October WTI crude oil futures contract into Friday’s close is likely to be determined by trader reaction to a pair of uptrending Gann angles at $54.96 and $54.75.
Bullish Scenario
A sustained move over $54.96 will indicate the presence of buyers. If this creates enough upside momentum then look for a rally back into the main 50% level at $55.72. Overcoming this level will indicate the buying is getting stronger.
Bearish Scenario
A failure to hold $54.96 will signal weakness. Crossing to the weak side of the uptrending Gann angle at $54.75 will signal the presence of sellers. This could trigger a steep break into a potential support cluster at $53.96 to $53.92. Taking out $53.92 could extend the selling into the next uptrending Gann angle at $53.46, followed by $53.11 then $52.96.
