Crude Oil Price Update – First Upside Target is $48.57 to $50.03 Retracement Zone

U.S. West Texas Intermediate crude oil futures are trading higher on Thursday despite concerns over volatile currency and stock markets. Traders are also ignoring signs of a global economic slowdown in 2019.

Today’s ADP Non-Farm Employment Change report came in well-above the 179K forecast, suggesting the labor market is strong despite worries over a potential recession. This news helped fuel a short-covering in the stock market, underpinning oil prices.

At 1355 GMT, February WTI crude oil is trading $47.21, up $0.67 or +1.43%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum may be getting ready to shift to the upside.

The main trend will change to up on a trade through $54.77. A move through $42.36 will signal a resumption of the downtrend.

The minor trend is also down. A trade trough $53.50 will change the minor trend to up. A move through $44.35 will signal a resumption of the downtrend.

The short-term range is $42.36 to $47.78. Its retracement zone at $45.07 to $44.43 is support.

The main range is $54.77 to $42.36. Its retracement zone at $48.57 to $50.03 is the first upside target.

Daily Technical Forecast

The market is trading inside yesterday’s range which suggests investor indecision and impending volatility.

A trade through $47.78 could trigger a rally into $48.57 to $50.03. Since the main trend is down, sellers could show up on a test of this zone.

Taking out $44.35 will be a sign of weakness. This will also put the market on the bearish side of the short-term retracement zone. If this move generates enough downside momentum then look for a potential acceleration into the last main bottom at $42.36, followed by the January 20, 2016 main bottom at $41.48.