Based on the early price action, the direction of the April WTI crude oil futures market on Wednesday is likely to be determined by trader reaction to the 50% level at $53.84 and the 61.8% level at $54.36.
U.S. Crude oil futures are trading higher on Wednesday shortly before the U.S. Energy Information Administration’s weekly inventories report. It’s expected to show a build of 2.1 million barrels. However, traders aren’t sure with this number since yesterday’s American Petroleum Institute’s report showed an unexpected drawdown. Underpinning prices are the OPEC-led production cuts and the U.S. sanctions on Venezuelan exports. However, demand concerns may be limiting gains.
At 13:00 GMT, April WTI crude oil futures are trading $53.77, up $0.31 or +0.60%.
The main trend is up according to the daily swing chart. A trade through $56.05 will signal a resumption of the uptrend. A move through $51.62 will change the main trend to down.
The short-term range is $56.05 to $51.62. Its retracement zone at $53.84 to $54.36 is providing resistance.
The main range is $43.00 to $56.05. If the trend changes to down then look for the selling to extent into its retracement zone at $49.53 to $47.99.
Based on the early price action, the direction of the April WTI crude oil futures market on Wednesday is likely to be determined by trader reaction to the 50% level at $53.84 and the 61.8% level at $54.36.
A sustained move over $54.36 will indicate the presence of buyers. This could trigger an acceleration to the upside with the next target angle coming in at $55.18.
A sustained move under $53.84 will signal the presence of sellers. The first downside target is a minor 50% level at $53.02. This is followed by the minor bottom at $51.62 and a long-term uptrending Gann angle at $51.50.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.