The direction of the January WTI crude oil market on Monday is likely to be determined by trader reaction to $40.56.
U.S. West Texas Intermediate (WTI) crude oil futures are trading higher on Monday, helped by a report that showed China’s crude oil throughput rose 2.6% in October from a year earlier to its highest-ever level as fuel demand firmed on strong holiday travel.
At 08:05 GMT, January WTI crude oil is at $41.35, up $0.95 or +2.35%
Prices are also being underpinned by hopes that OPEC+ will hold current output curbs, offsetting concerns about weaker fuel demand due to rising COVID-19 cases and higher production from Libya, but traders caution that gains could be limited since this news may have been fully-priced into the market.
The main trend is up according to the daily swing chart. A trade through $44.33 will signal a resumption of the uptrend. The main trend will change to down on a move through the nearest main bottom at $34.04.
The minor trend is also up. A trade through $40.33 will change the minor trend to down. This will also shift momentum to the downside.
The main range is $44.59 to $34.04. Its retracement zone at $39.32 to $40.56 is support.
The minor range is $43.33 to $40.33. Its 50% level or pivot at $41.83 is potential resistance.
The short-term range is $34.04 to $43.33. Its retracement zone at $38.69 to $37.59 is potential support.
The direction of the January WTI crude oil market on Monday is likely to be determined by trader reaction to $40.56.
A sustained move over $40.56 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into $41.83. Sellers could come in on the first test of this level, but overtaking it is likely to trigger an acceleration to the upside.
A sustained move under $40.56 will signal the presence of sellers. Taking out the minor bottom at $40.33 will shift momentum to the downside. This could trigger a further break into the 50% level at $39.32.
For a look at all of today’s economic events, check out our economic calendar.
James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.