Crude Oil Price Update – Testing Weekly 50% Level at $64.97, Could Act Like Pivot

December West Texas Intermediate crude oil futures are trading sharply lower on the weekly chart. The selling is being fueled by concerns over rising global supply and worries that a slowdown in the global economy will lead to a drop in demand for crude oil.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. However, momentum is trending lower. The main trend will change to down on a trade through $63.48 with $62.32 the next major downside target. The market is in no position to change the main trend to up, but it is in the window of time for a potentially bullish weekly closing price reversal bottom.

The market is currently testing the lower level of a major long-term retracement zone at $64.97 to $70.72.

The main range is $45.51 to $76.72. Its retracement zone at $61.12 to $57.43 is the next retracement zone target.

Weekly Technical Analysis Forecast

Based on this week’s price action, the direction of the December WTI crude oil futures contract into Friday’s close is likely to be determined by trader reaction to the major 50% level at $64.97.

Bullish Scenario

Holding $64.97 will indicate the return of buyers. If they can generate enough upside momentum then we could see a rebound rally into the steep downtrending Gann angle at $68.72. This angle, moving down at a rate of $2.00 per week, has been guiding this market lower since the $76.72 main top was formed the week-ending October 5.

Bearish Scenario

A sustained move under $64.97 will indicate the selling is getting stronger. This could trigger a further break into the main bottom at $63.48, followed by a long-term uptrending Gann angle at $63.26. We could see a technical bounce on the first test of this angle, but if it fails then look for the selling to extend into $62.32, followed by another 50% level at $61.12.