Crude Oil Price Update – Testing Crucial Value Zone; Look Out Below if $47.26 Fails as Support

October West Texas Intermediate Crude Oil continued to feel selling pressure from the fallout over weak Chinese data and a stronger U.S. Dollar. According to reports, Chinese oil refineries operated in July at their slowest daily rates since September, raising concerns about demand.

The dollar is also mounting a huge recovery as tensions between the United States and North Korea continue to dissipate. Additionally, the dollar firmed on the back of robust retail sales data earlier today. A stronger U.S. Dollar will weigh on demand for dollar-denominated crude oil.

Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is clearly to the downside. If the selling continues at this pace, bearish trader should easily take out the main bottom at $45.58 over the near-term, changing the main trend to down.

The market is down 10 days from its most recent swing top, putting it in the window of time for a potentially bullish closing price reversal bottom.

Currently the market is trading inside a series of retracement levels at $48.04, $47.46, $47.26 and $46.49. The best potential support cluster is $47.46 to $47.26. We could see a technical bounce or short-covering rally if this area holds.

Forecast

Based on the current price at $47.40, the direction of the crude oil market today will be determined by a pair of uptrending Gann angles at $47.58 and $47.26.

Holding $47.26 will indicate the presence of buyer, but overcoming $47.58 will indicate the buying is strong. This could lead to a test of a downtrending angle at $48.01, followed by a 50% level at $48.04.

The 50% level at $48.04 is the trigger point for a possible huge rally because there is no resistance until $49.26.

Look out to the downside if $47.26 fails as support. The next downside targets are $46.58 and $46.49.

Basically, look for a bullish tone to develop on a sustained move over $47.58 and for the bearish tone to be sustained on a move under $47.26.