Crude Oil Price Update – Short-Term Strength Over $52.88, Weakens Under $51.81 with $50.63 Next TargetThe early price action indicates the direction of the market into the close will be determined by trader reaction to $52.88.
U.S. West Texas Intermediate crude oil futures are edging higher on Tuesday shortly after the regular session opening as a weaker U.S. Dollar drove up demand for the dollar-denominated asset. The market was also boosted by optimism that government stimulus will eventually lift global economic growth and oil demand, somewhat offsetting concerns that renewed COVID-19 pandemic lockdowns would weaken fuel consumption.
At 15:34 GMT, March WTI crude oil futures are trading $52.96, up $0.54 or +1.03%.
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In other news, the International Energy Agency (IEA) cut its outlook for oil demand in 2021, but pointed to a recovery in demand in the second half of the year to an annual average of 96.6 million barrels per day.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on January 13.
A trade through $53.94 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through $47.31.
The minor trend is down. This confirmed the shift in momentum. A trade through $53.86 will change the minor trend to up.
The minor range is $53.94 to $51.81. Its 50% level at $52.88 is currently being tested.
The short-term range is $47.31 to $53.94. Its 50% level at $50.63 is the next downside target.
Daily Swing Chart Technical Forecast
The early price action indicates the direction of the market into the close will be determined by trader reaction to $52.88.
A sustained move over $52.88 will indicate the presence of buyers. If this move creates enough upside momentum then look for a test of $53.94. Taking out this level will put the market back on track for an eventual test of the January 8, 2020 main top at $57.41.
A sustained move under $52.88 will signal the presence of sellers. This could trigger a break into the intraday low at $51.81. Taking out this level will signal a resumption of the downtrend with $50.63 the next likely downside target.