Crude Oil Price Update – Sellers Still Defending $56.81-$58.21 Retracement Zone

U.S. West Texas Intermediate crude oil futures are trading flat early Tuesday after reaching its highest level since September 24 during the previous session. Yesterday’s gains were fueled by Friday’s better-than-expected U.S. labor market data and hopes for a U.S.-China trade deal. Helping to put a lid on the market early in today’s session are emerging doubts over deeper OPEC production cuts.

At 04:06 GMT, December WTI crude oil is trading $56.50, down $0.04 or -0.07%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up two weeks ago and was reaffirmed on Monday when buyers took out the previous top at $56.92. The new main bottom is $53.71. The trend will change to down on a trade through this bottom.

The intermediate range is $59.11 to $50.89. Its retracement zone at $55.97 to $55.00 is support. Holding above this area will help maintain the upside bias.

The main range is $62.74 to $50.89. Its retracement zone at $56.81 to $58.21 is the primary upside target and potential resistance zone. It is also controlling the near-term direction of the market. Last week, the zone stopped the rally at $56.92. On Monday, the zone stopped the rally at $57.43.

Daily Swing Chart Technical Forecast

Based on Monday’s price action and the current price at $56.50, the direction of the December WTI crude oil futures contract on Tuesday is likely to be determined by trader reaction to the main 50% level at $56.81.

Bullish Scenario

A sustained move over $56.81 will indicate the presence of buyers. The first upside target is yesterday’s high at $57.43. Overtaking this level will likely lead to a test of the main Fibonacci level at $58.21. This is a potential trigger point for an acceleration to the upside with $59.11 the next target.

Bearish Scenario

A sustained move under $56.81 will signal the presence of sellers. The first downside target is the intermediate Fibonacci level at $55.97. The market could accelerate to the downside under this level with the 50% price at $55.00 the next target.