Advertisement
Advertisement

Crude Oil Price Update – Testing Two-Month Retracement Zone; Strengthens Over $58.21, Weakens Under $56.81

By:
James Hyerczyk
Published: Nov 12, 2019, 08:09 UTC

Based on Monday’s close at $56.86, the direction of the December WTI crude oil futures contract on Tuesday is likely to be determined by trader reaction to the main 50% level at $56.81.

WTI Crude Oil

U.S. West Texas Intermediate crude oil futures finished lower on Monday as the uncertainty over U.S.-China trade relations continued to cap gains. Worries over whether OPEC and its allies will deepen production cuts at their December 5-6 meeting have also proved to be an upside momentum-killer as well as fears over rising U.S. supply.

On Monday, December WTI crude oil settled at $56.86, down $0.38 or -0.66%.

“Oil prices are struggling at the start of the week as trade concerns derail some of the momentum we saw in October that a phase one deal would deliver a boost for energy demand,” said Edward Moya, senior market strategist at OANDA.

WTI Crude Oil
Daily December WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $57.88 will signal a resumption of the uptrend with $59.11 the next main top target. The main trend will change to down on a move through the last swing bottom at $53.71.

The main range is $62.74 to $50.89. The market is currently testing its retracement zone at $56.81 to $58.21. This zone stopped the rally last week at $57.88.

The intermediate range is $59.11 to $50.89. Its retracement zone at $55.97 to $55.00 is support. The market has been hovering over its upper or Fibonacci level at $55.97 for six trading sessions.

The new short-term range is $50.89 to $57.88. If the downside pressure escalates then look for the selling to extend into its retracement zone at $54.39 to $53.56.

Daily Swing Chart Technical Forecast

Based on Monday’s close at $56.86, the direction of the December WTI crude oil futures contract on Tuesday is likely to be determined by trader reaction to the main 50% level at $56.81.

Bullish Scenario

A sustained move over $56.81 will signal the presence of buyers. If this move can generate enough upside momentum then look for the rally to possibly extend into the minor top at $57.88, followed closely by the main Fibonacci level at $58.21.

Taking out $58.21 could trigger a breakout into the September 23 main top at $59.11.

Bearish Scenario

A sustained move under $56.81 will indicate the presence of sellers. The first two downside targets are the intermediate Fibonacci level at $55.97, followed by a low at $55.76.

If $55.76 fails to hold then look for a break into the intermediate 50% level at $55.00.

About the Author

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.

Did you find this article useful?

Advertisement