Crude Oil Price Update – Momentum Shifts to Downside Under Fib Level at $48.63

October West Texas Intermediate crude oil futures are trading lower and inside yesterday’s range. This indicates investor indecision and impending volatility. It could also be an early indication of a shift in investor sentiment.

Later today at 1430 GMT, the U.S. Energy Information Administration will release its weekly inventories report. It is expected to show a build of about 4.1 million barrels. The build is the result of the impact of Hurricane Harvey on demand.

Technical Analysis

The main trend is up according to the daily swing chart. If the rally continues then $50.35 and $50.51 will become the primary upside targets. A move back under the previous top at $48.91 will be a sign that the buying is getting weaker.

The main range is $50.51 to $45.58. Its retracement zone at $48.63 to $48.05 is support.

Forecast

Based on the current price at $48.92 and the earlier price action, the direction of the market today is likely to be determined by trader reaction to the downtrending angle at $48.89.

Holding above $48.89 will indicate the presence of buyers. This could create enough upside momentum to challenge a pair of angles at $49.58 and $49.70. Crossing to the strong side of the downtrending angle at $49.70 will put the market in a strong position. This is also the last potential resistance angle before the $50.51 main top.

A sustained move under the downtrending angle at $48.89 will signal the presence of sellers. This could drive the market into the Fibonacci level at $48.63.

The Fib level at $48.63 is the trigger point for a possible acceleration into the 50% level at $48.05 and the steep uptrending angle at $47.58.

Basically, look for a strong rally on a sustained move over $49.70 and the start of a sell-off under $48.89.