Crude Oil Price Update – Sustained Move Under $60.56 Could Create Momentum Needed to Challenge $57.67 – $56.22
U.S. West Texas Intermediate crude oil futures are trading lower early Tuesday, following through to the downside after dropping sharply the previous session. The selling is being fueled by profit-taking on concern that OPEC and its allies may agree to increase global supply when it meets later in the week on March 4.
At 03:27 GMT, April WTI crude oil is trading $59.66, down $0.98 or -1.62%.
Market sentiment was also dampened by weak manufacturing data out of China. The world’s second-largest economy reported that activity growth slipped to a nine-month low in February, which may curtail Chinese crude demand and pressure oil prices.
A stronger U.S. Dollar also contributed to the weakness by dampening foreign demand for dollar-denominated crude oil.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through $63.81 will signal a resumption of the uptrend. The main trend will change to down on a trade through $57.31.
The minor trend is also up. Taking out $58.60 will change the minor trend to down and shift momentum to the downside.
The minor range is $57.31 to $63.81. The market is currently trading on the weak side of its 50% level at $60.56.
The short-term range is $51.53 to $63.81. Its retracement zone at $57.67 to $56.22 is the primary downside target. Buyers could come in on the first test of this area, but it is also the trigger point for an acceleration to the downside.
Daily Swing Chart Technical Forecast
The direction of the April crude oil market on Tuesday is likely to be determined by trader reaction to the pivot at $60.56.
A sustained move under $60.56 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the minor bottom at $58.60.
If $58.60 fails as support then look for the break to possibly continue into the short-term 50% level at $57.67, followed by the main bottom at $56.31. Taking out this level will change the main trend to down with the short-term Fibonacci level at $56.22 the next target.
A sustained move over $60.56 will signal the return of buyers. The first target will be $61.63. However, this level will drop as the market moves lower. Essentially, we could see a 50% retracement of the first leg down.