Crude Oil Price Update – Fib Level at $54.02 is Trigger Point for Upside AccelerationBased on the early price action, the direction of the March WTI crude oil the rest of the session is likely to be determined by trader reaction to the short-term 50% level at $53.49.
U.S. West Texas Intermediate crude oil futures are trading nearly 2 percent higher after Saudi Arabia said it would reduce crude production to around 9.8 million bpd in March, over half a million bpd more than its pledged to cut. This comes on top of a report in January which showed OPEC removed 797,000 barrels per day from the market, just short of its target to cut a combined 812,000 bpd.
At 16:06 GMT, March WTI crude oil is trading $53.26, up $0.85 or +1.53%.
Traders are also expressing optimism over the start of U.S.-China trade talks as well as the news that a deal has been struck to avert another government shutdown.
Daily Technical Analysis
The main trend is down according to the daily swing chart. It turned down on Monday when sellers took out the previous bottom at $51.33. The main trend will change to up on a trade through $55.75. A move through $51.23 will signal a resumption of the downtrend.
The short-term range is $55.75 to $51.23. Its retracement zone at $53.49 to $54.02 is resistance. It stopped the rally earlier in the session. Since the main trend is down, sellers came in on a test of this zone in an effort to form a potentially bearish secondary lower top.
The main range is $42.67 to $55.75. If the downtrend continues then look for an eventual break into the value zone at $49.21 to $47.67.
Daily Technical Forecast
Based on the early price action, the direction of the March WTI crude oil the rest of the session is likely to be determined by trader reaction to the short-term 50% level at $53.49.
A sustained move over $53.49 will indicate the presence of buyers. Look for an early labored rally with the next two targets the downtrending Gann angle at $53.79 and the short-term Fibonacci level at $54.02. Overtaking $54.02 could trigger an extension of the rally into the short-term downtrending Gann angle at $54.88. This is the last potential resistance angle before the $55.75 main top.
A sustained move under $53.49 will signal the presence of sellers. The first downside target is a minor pivot at $52.46. If this fails then the selling could extend into the minor bottom at $51.23, followed by the uptrending Gann angle at $50.92.
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