Crude Oil Price Update – Selling Momentum Could Drive Crude into $54.72 to $53.98

U.S. West Texas Intermediate crude oil futures are trading lower on Tuesday following yesterday’s steep decline. The market was hit hard on Monday, falling 3.11%, after U.S. President Donald Trump called on OPEC to ease its efforts to boost the market. Since January 1, OPEC and its allies, including Russia, have been reducing production by about 1.2 million barrels per day (bpd).

At 07:31 GMT, April WTI crude oil is trading $55.28, down $0.20 or -0.36%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $57.81 will signal a resumption of the uptrend. A trade through $51.62 will change the main trend to down. Keep in mind the market rallied 12 percent from February 11 before yesterday’s steep break. So it’s going to take a lot of selling to change the main trend.

The minor trend is also up. A move through $53.51 will change the minor trend to down. This will also shift momentum to the downside.

The main range is $51.62 to $57.81. Its retracement zone at $54.72 to $53.98 is the primary downside target. Since the main trend is up, buyers could show up on a test of this zone.

Daily Technical Forecast

Based on the early price action, the direction of April WTI crude oil market is likely to be determined by trader reaction to the steep downtrending Gann angle at $55.81.

Bullish Scenario

Taking out $55.81 and sustaining the move will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into a potential resistance cluster at $56.62 to $57.81.

Bearish Scenario

A sustained move under $55.81 will signal the presence of sellers. The first target is the short-term 50% level at $54.72. Look for a technical bounce on the first test of this level.

If $54.72 fails as support then look for the selling to extend into an uptrending Gann angle at $54.12, followed by a short-term Fibonacci level at $53.98. This is the last critical support level. If it fails then sellers are likely to go after the support cluster formed by the minor bottom at $53.51, followed by the long-term uptrending Gann angle at $53.50.