Crude Oil Price Update – Downtrending Gann Angle at $58.48 Potential Trigger Point for Acceleration to Upside

U.S. West Texas Intermediate crude oil futures surged more than 2% on Thursday following a Reuters report that OPEC and its allies are likely to extend output cuts until mid-2020. There was no mention of whether they would deepen the cuts in production. Nonetheless, the price action clearly indicates that traders liked the news. Further underpinning prices was the news that China had invited U.S. trade negotiators for a fresh round of talks.

At 19:05 GMT, January WTI crude oil is trading $58.32, up $1.31 or +2.32%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The main trend turned up when buyers took out the last swing top at $58.17. The next upside target is the September 23 main top at $58.64. The swing chart shows that this top is a potential trigger point for an acceleration to the upside with the September 16 main top at $61.48 the next target.

The main new main bottom is $54.85. A trade through this bottom will change the main trend to down.

The main range is $61.48 to $50.69. Its retracement zone at $57.36 to $56.08 is new support. Trading above this zone is also helping to generate the upside momentum.

Daily Technical Forecast

Based on the early price action and the current price at $58.32, the direction of the January WTI crude oil market into the extended close is likely to be determined by trader reaction to the downtrending Gann angle at $58.48. This angle stopped the rally earlier today.

Bullish Scenario

Taking out $58.48 and sustaining the rally will indicate the buying is getting stronger. This could trigger a further rally into the main top at $58.64. Taking out this top could trigger a surge into a downtrending Gann angle at $59.98. This is the last potential resistance angle before the $61.48 main top.

Bearish Scenario

A sustained move under $58.48 will signal the presence of sellers. Breaking back below the former top at $58.17 will indicate the selling is getting stronger. This could trigger a further break into the main Fibonacci level at $57.36.