Crude Oil Price Update – Crossed Over to Bullish Side of Retracement ZoneBased on the early price action and the current price at $50.83, the direction of the February WTI crude oil market on Wednesday is likely to be determined by trader reaction to the main Fibonacci level at $50.03.
U.S. West Texas Intermediate crude oil futures are trading sharply higher on Wednesday after breaking out over a key retracement zone. The move is being fueled by a bigger-than-expected draw in U.S. crude inventories according to the American Petroleum Institute, hope that the U.S and China are close to a new trade deal and the on-going OPEC-led production cuts, which are expected to reduce the global supply glut.
At 1232 GMT, February WTI crude oil is trading $50.85, up $1.07 or +2.14%.
Daily Technical Analysis
The main trend is down according to the daily swing chart, however, momentum is trending higher. The main trend will change to up on a move through $54.77. A trade through $42.36 will signal a resumption of the downtrend.
Minor top targets come in at $53.50 and $54.44.
The main range is $54.77 to $42.36. Its retracement zone is $50.03 to $48.57. The market is currently trading on the strong side of this zone, helping to support the upside bias. The retracement zone is new support.
Daily Technical Forecast
Based on the early price action and the current price at $50.83, the direction of the February WTI crude oil market on Wednesday is likely to be determined by trader reaction to the main Fibonacci level at $50.03.
A sustained move over $50.03 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to extend into the downtrending Gann angle at $51.77. Look for a technical bounce on the first test of this angle.
Overtaking $51.77 will indicate the buying is getting stronger. If this generates enough upside momentum then look for a potential surge into $53.27 over the near-term.
A sustained move under $50.03 will signal the presence of sellers. If this move creates enough downside momentum then look for a potential spike into the 50% level at $48.57.
The market is also up 10 days from the last bottom. This makes crude oil ripe for a closing price reversal top.