Crude Oil Price Update – Testing Major Retracement Zone at $48.05 to $48.63

October West Texas Intermediate crude oil futures are spiking higher on Tuesday as the gradual restart of Texas Gulf Coast refineries drives up crude oil demand.

Technical Analysis

The main trend is down according to the daily swing chart, but momentum has swung to the upside. A trade through $48.91 will change the main trend to up.

The short-term range is $48.91 to $45.58. Its retracement zone is $47.64 to $47.25. Crossing to the strong side of this area is helping to give prices an upside bias.

The main range is $50.51 to $45.58. Its retracement zone at $48.05 to $48.63 is the primary upside target. This zone is currently being tested. Since the main trend is down, sellers are likely to show up on a test of this retracement area.

Forecast

Based on the current price at $48.09 and the earlier price action, the direction of crude oil the rest of the session is likely to be determined by trader reaction to the 50% level at $48.05.

A sustained rally over $48.05 will indicate the buying is getting stronger. This could trigger another spike into the main Fibonacci level at $48.63. This is followed by the main top at $48.91 and a downtrending angle at $48.95.

A sustained move under $48.05 will signal the presence of sellers. This is followed by potential downside targets at $47.64, and a support cluster at $47.39 to $47.08.

Watch the price action and read the order flow at $48.05 all session. Trader reaction to this level will tell us if the buyers or the sellers are in control.