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Crude Oil Price Update – Could Strengthen Over $62.05, Weaken Under $61.68

Based on the early price action, the direction of the February WTI crude oil market on Friday is likely to be determined by trader reaction to Thursday’s close at $61.68.
James Hyerczyk
WTI Crude OIl

U.S. West Texas Intermediate crude oil futures hit their highest level since May 21 earlier in the session on Friday. Traders are saying the market is being underpinned by a report that showed record online spending by U.S. consumers, stoking faith in the world’s no. 1 economy even before the hoped for end to the trade war between the United States and China.

At 07:14 GMT, February WTI crude oil is trading $61.81, up $0.13 or +0.21%.

The price action is a little subdued early Friday as traders await the release of the U.S. Energy Information Administration (EIA) weekly inventories report at 15:30 GMT. It is expected to show a draw of about 1.7M barrels. Earlier in the week, the American Petroleum Institute (API) reported a larger-than-expected drawdown.

Daily February WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session when buyers took out yesterday’s high. The nearest main bottom comes in at $54.75.

The uptrend is safe for now, however, due to the prolonged move up in terms of price and time, today’s trading session begins with the market inside the window of time for a potentially rally-ending closing price reversal top.

The minor trend is also up. A trade through $60.02 will change the minor trend to down.

The market is currently trading inside a major retracement zone formed by a main top at $72.22 and a main bottom at $45.60. On the upside is $62.05. On the downside is $58.91.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the February WTI crude oil market on Friday is likely to be determined by trader reaction to Thursday’s close at $61.68.

Bullish Scenario

A sustained move over $61.68 will indicate the presence of buyers. If this creates enough upside momentum then look for a test of the Fibonacci level at $62.05. This is a potential trigger point for an acceleration to the upside with the April 22 main top at $63.87 the next likely upside target.

Bearish Scenario

A sustained move under $61.68 will signal the presence of sellers. If this creates enough downside momentum then look for a test of a minor pivot at $60.95.

If $60.95 fails as support then look for the selling to possibly extend into the minor bottom at $60.02. Taking out this bottom will change the minor trend to down and shift momentum to the downside.

Side Notes

The chart pattern also suggests a strong upside bias could develop on a sustained move over the Fibonacci level at $62.05, and a downside bias will begin on a sustained move under $61.68.

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