Crude Oil Price Update – Strengthens Over $53.89, Weakens Under $52.49

U.S. West Texas Intermediate crude oil futures are trading higher, but have given back more than half of their earlier gains. Fueling the early strength was short-covering and some speculative buying related to the economic and political turmoil in Venezuela. Also underpinning the market are the OPEC-led production cuts which are helping to limit supply. However, gains are being limited by worries over a global economic slowdown and shaky U.S.-China trade relations.

At 1315 GMT, March WTI crude oil is trading $53.36, up $0.23 or +0.43%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, upside momentum has slowed a little since the formation of the closing price reversal top at $54.32 on January 22. A trade through $54.32 will negate the closing price reversal top and signal a resumption of the uptrend. A move through $50.66 will change the main trend to down.

The minor trend is also up. A trade through $54.32 will signal a resumption of the minor uptrend. A move through $51.86 will change the minor trend to down.

The short-term range is $50.66 to $54.32. Its 50% level or pivot at $52.49 is controlling the direction of the market today.

The main range is $42.67 to $54.32. If the main trend changes to down then its retracement zone at $48.59 to $47.19 will become the primary downside target.

Daily Technical Forecast

Based on the early price action, the direction of the March WTI crude oil market the rest of the session is likely to be determined by trader reaction to the uptrending Gann angle at $53.17 and the downtrending Gann angle at $53.89.

Bullish Scenario

A sustained move over $53.17 will indicate the presence of buyers, but the trigger point for an upside breakout is $53.89. The next two targets are main tops at $54.32 and $54.98. The latter is the trigger point for an acceleration to the upside.

Bearish Scenario

The inability to take out $53.89 will signal the presence of sellers. Crossing to the weak side of $53.17 will indicate the selling is getting stronger. This could trigger a further break into a downtrending Gann angle at $52.79, followed by the pivot at $52.49.

If $52.49 fails then sellers are likely to go after $51.86. Look for an acceleration to the downside under $51.86 with targets coming in at $50.66 and $50.61.

Basically, we’re looking for an upside bias to develop on a sustained move over $53.89 and for a downside bias to develop on a sustained move under $52.79.