Crude Oil Price Update – Close Under $58.82 Produces Potentially Bearish Closing Price Reversal TopThe main trend is up according to the daily swing chart, however, momentum is trending lower. Thursday’s closing price reversal top and today’s confirmation of the chart pattern is helping to pressure prices.
Concerns over future demand are driving U.S. West Texas Intermediate crude oil futures sharply lower late Friday. The selling pressure has been strong enough to erase all of the week’s earlier gains and turn the market lower for the week. This weekly closing price reversal chart pattern is a strong sign that the selling is greater than the buying at current price levels. Although it doesn’t change the trend, it could lead to the start of a 2 to 3 week correction.
At 18:38 GMT, May WTI crude oil futures are trading $58.95, down $1.03 or -1.70%.
A dovish U.S. Federal Reserve and weaker-than-expected Euro Zone economic reports earlier today are behind the selling pressure.
Daily Technical Analysis
The main trend is up according to the daily swing chart, however, momentum is trending lower. Thursday’s closing price reversal top and today’s confirmation of the chart pattern is helping to pressure prices.
The minor trend is down. It turned down earlier today when sellers took out $58.56. This move confirmed the shift in momentum.
The major 50% level at $59.63 is a long-term resistance level.
The main range is $54.87 to $60.39. If the downside momentum continues then look for the selling to extend into tis retracement zone at $57.37 to $56.78. Since the main trend is up, buyers are likely to come in on a test of this zone.
Daily Technical Forecast
Given the current price at $58.95, the nearest resistance is the major 50% level at $59.63, followed closely by the steep uptrending Gann angle at $59.87. Overtaking this level will put the market in a bullish position.
If the downside momentum continues then look for a test of the next minor bottom at $58.03. This is followed by an uptrending Gann angle at $57.37. Look for a technical bounce on the first test of this angle. If it fails then look for the selling to extend into the 50% level at $57.37. This is also another potential support level. If it fails then look for the selling to possibly extend into the Fibonacci level at $56.78.