Crude Oil Price Update – Close Under $58.58 Forms Potentially Bearish Closing Price Reversal TopBased on Friday’s price action and the current price at $57.66, the direction of the January WTI crude oil market into the close is likely to be determined by trader reaction to the main Fibonacci level at $57.36.
U.S. West Texas Intermediate crude oil futures are trading lower late Friday, putting it in a position to form a potentially bearish closing price reversal top. After hitting a two-month high earlier in the session, prices retreated as concern over U.S.-China trade talks encouraged traders to square positions ahead of the weekend.
At 19:12 GMT, January WTI crude oil futures are trading $57.66, down $0.92 or -1.57%.
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Furthermore, after a two-day gain of more than 7%, some speculators decided to book profits. Losses are being limited by expectations that OPEC and its allies are planning to extend their program to cut production when they meet on December 5-6.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through $58.74 will signal a resumption of the uptrend. The main trend will change to down on a trade through $54.85.
A close below $58.58 will form a closing price reversal top. This chart pattern won’t change the main trend to down, but it will indicate the selling is greater than the buying at current price levels. This could trigger the start of a 2 to 3 day correction.
The main range is $61.48 to $50.69. Its retracement zone at $57.36 to $56.08 is support. This zone is also controlling the near-term direction of the market.
The minor range is $54.85 to $58.74. Its 50% level at $56.80 is another potential downside target. Since the main trend is up, buyers could return on a test of this level.
Daily Technical Forecast
Based on Friday’s price action and the current price at $57.66, the direction of the January WTI crude oil market into the close is likely to be determined by trader reaction to the main Fibonacci level at $57.36.
Taking out $57.36 will indicate the selling is getting stronger. This could trigger a further break into the minor 50% level at $56.80.
A successful test of $57.36 will signal that buyers are coming in to protect the uptrend. This move won’t matter much unless the buying is strong enough to turn the market higher for the session.