Crude Oil Price Update – Failure to Hold $70.83 Could Trigger Break into $67.89 – $66.60

U.S. West Texas Intermediate crude oil futures are edging higher early Friday, putting the market in a position to post its biggest weekly gain since late August, as the easing concerns over the Omicron coronavirus variant on global growth and fuel demand drove market sentiment.

At 09:01 GMT, January WTI crude oil is trading $71.33, up $0.39 or +0.55%. On Thursday, the United States Oil Fund (USO) ETF settled at $51.01, down $1.41 or -2.69%.

The U.S. benchmark is on course to rise more than 6% this week, even after a brief profit-taking, their first weekly gain in seven weeks.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of the closing price reversal bottom on December 2.

A trade through $79.23 will change the main trend to up. A move through $62.43 will signal a resumption of the downtrend.

The main range is $83.83 to $62.43. Its retracement zone at $73.13 to $75.66 is controlling the near-term direction of the market. It stopped the selling on Thursday at $73.34.

The short-term range is $79.23 to $62.43. Its retracement zone at $70.83 to $72.81 is currently being tested.

The combination of these zones creates a resistance cluster at $72.81 to $73.13. This area was tested successfully on Thursday.

The minor range is $62.43 to $73.34. Its retracement zone at $67.89 to $66.60 is the nearest support area.

Daily Swing Chart Technical Forecast

The direction of the January WTI crude oil market on Friday is likely to be determined by trader reaction to $70.83.

Bullish Scenario

A sustained move over $70.83 will indicate the presence of buyers. If this move creates enough upside momentum then look for a possible surge into the resistance cluster at $72.81, $73.13 and $73.34.

Overtaking $73.34 will indicate the buying is getting stronger. This could trigger a rally into the main Fibonacci level at $75.66.

Bearish Scenario

A sustained move under $70.83 will signal the presence of sellers. If this move generates enough downside momentum then look for a potential acceleration into $67.89 to $66.60.