Crude Oil Price Update -Next Major Move in the Hands of Trend Traders

U.S. West Texas Intermediate crude oil futures settled higher on Friday after hitting a multi-month high early in the session in reaction to the announcement of a trade deal between the United States and China, and following the huge victory by the U.K. Prime Minster Boris Johnson’s Conservative Party in the country’s general election that gave him the power to drive through his Brexit deal and take the U.K. out of the EU before the January 31 deadline. Traders feel that both moves could help to drive demand growth and stabilize prices.

On Friday, February WTI crude oil settled at $59.98, up $0.92 or +1.56%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $60.39 will signal a resumption of the uptrend. A move through $54.75 will change the main trend to down. This move is highly unlikely today, but due to the prolonged move up in terms of price and time, traders should be on the lookout for a closing price reversal top.

The long-term range is formed by the October 3, 2018 top at $72.22 and the December 24, 2018 bottom at $45.60. Its retracement zone at $58.91 to $62.05 is controlling the longer-term direction of the market. Crude oil is currently trading inside this zone.

The next major range is $53.87 to $50.24. Its retracement zone comes in at $57.06 to $58.66. This is potential support.

The minor range is $54.75 to $60.39. Its 50% level at $57.57 is also potential support.

The 50% level at $58.91 and the Fibonacci level at $58.66 combine to form a potential support cluster.

Daily Swing Chart Technical Forecast

There is no “trigger point” for a breakout on Monday. The price action will be determined by the trend traders.

If the trend buying remains strong then traders will try to take out Friday’s high at $60.39. Taking out this level will signal a resumption of the uptrend with $62.05 the next likely upside target.

If the trend traders decide to sell then look for a potential pullback into the support cluster at $58.91 to $58.66. Watch for a technical bounce on the first test of this area. If it fails then look for the selling to possibly extend into $57.57 to $57.06.