Crude Oil Price Update – Strengthens Over $55.72, Weakens Under $53.95

On Friday, October WTI crude oil settled between a pair of 50% levels at $53.95 and $55.72. Since the trend is down, we’ll look at it from the short-side perspective. Based on the close at $54.81, the direction of the market on Monday is likely to be determined by trader reaction to the main 50% level at $55.72.
James Hyerczyk
WTI Crude Oil

U.S. West Texas Intermediate crude oil futures finished higher on Friday, but well off their lows. The market spiked early in the session as tensions eased over a U.S. recession following Thursday’s stronger than expected retail sales report. Traders were also optimistic that central banks would provide enough stimulus to prevent a global economic slowdown.

On Friday, October WTI crude oil settled at $54.81, up $0.39 or +0.72%.

Gains were capped and prices retreated throughout the session after OPEC provided a downbeat oil-market outlook for the rest of 2019 as economic growth slows and highlighted challenges in 2020 as rivals pump more, supporting the case for continuing the OPEC-led production cuts.

Daily October WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $57.40 will change the main trend to up. A move through $50.50 will signal a resumption of the downtrend.

The minor trend is also down. A trade through $57.40 will change the minor trend to up. Taking out $53.77 will signal a resumption of the minor downtrend after several days of sideways-to-higher price action.

The main range is $60.93 to $50.50. Its retracement zone at $55.72 to $56.95 is resistance.

The minor range is $50.50 to $57.40. Its retracement zone at $53.95 to $53.14 is support. This zone stopped the selling at $53.77 on August 15.

Daily Swing Chart Technical Forecast

On Friday, October WTI crude oil settled between a pair of 50% levels at $53.95 and $55.72. Since the trend is down, we’ll look at it from the short-side perspective. Based on the close at $54.81, the direction of the market on Monday is likely to be determined by trader reaction to the main 50% level at $55.72.

Bearish Scenario

A sustained move under $55.72 will indicate the presence of sellers. The first downside target is the short-term 50% level at $53.95, followed closely by the minor bottom at $53.77. Taking out this level could drive the market into the Fibonacci level at $53.14.

The daily chart is wide open to the downside under $53.14 so this could be the trigger point for an acceleration to the downside with the next major target the main bottom at $50.50.

Bullish Scenario

Holding $53.95 will be the first sign of buyers, but taking out $55.72 will indicate the buying is getting stronger. If this move creates enough upside momentum then look for the rally to possibly extend into the main Fibonacci level at $56.95, followed closely by the main top at $57.40. Taking out this level will change the main trend to up.

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