Crude Oil Price Update – Trade Through $61.09 Confirms Closing Price Reversal TopBased on yesterday’s price action and the close at $61.66, the direction of the February WTI crude oil on Tuesday is likely to be determined by trader reaction to the pivot at $61.18 and yesterday’s low at $61.09.
U.S. West Texas Intermediate crude oil futures closed lower on Monday on below average trading volume ahead of Wednesday’s New Year’s holiday. Helping to underpin prices were tensions in the Middle East after U.S. air strikes on Sunday against the Katib Hezbollah militia group in Iraq and Syria.
Prices were also supported after White House’s trade adviser said on Monday that the U.S.-China Phase 1 trade deal would likely be signed in the next week. By the end of the session, however, the potentially bullish news was not strong enough to offset the drop in buying volume.
On Monday, February WTI crude oil settled at $61.66, down $0.06 or -0.10%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. However, momentum may be getting ready to shift to the downside with the formation of a closing price reversal top.
A trade through $61.09 will confirm the closing price reversal top. This could trigger the start of a 2 to 3 day correction. A move through $62.34 will negate the closing price reversal top and signal a resumption of the uptrend.
The minor trend is also up. A trade through $60.02 will change the minor trend to down. This will confirm the shift in momentum to the downside.
The first minor range is $60.02 to $62.34. Its 50% level or pivot comes in at $61.18.
The second minor range is $57.62 to $62.34. Its 50% level or pivot is $60.02.
Since the main trend is up, buyers could come in on the first tests of $61.18 and $60.02.
Daily Swing Chart Technical Forecast
Based on yesterday’s price action and the close at $61.66, the direction of the February WTI crude oil on Tuesday is likely to be determined by trader reaction to the pivot at $61.18 and yesterday’s low at $61.09.
A sustained move over $61.18 will indicate the presence of buyers. If this creates enough upside momentum, buyers could take another run at $62.34.
A sustained move under $61.09 will confirm the closing price reversal top. This could trigger an acceleration to the downside with the next targets the minor bottom at $60.02 and the pivot at $59.98.