Crude Oil Price Update – Trader Reaction to $41.57 Sets Tone into CloseThe direction of the December WTI crude oil market into the close is likely to be determined by trader reaction to the Fibonacci level at $41.57.
U.S. West Texas Intermediate crude oil futures are edging higher at the mid-session on Friday, boosted by bullish signals from an OPEC meeting this week. However, gains were capped after a Libyan commander said a blockade on the country’s oil exports would be lifted for a month.
At 15:48 GMT, December WTI crude oil futures are trading $41.73, up $0.20 or +0.48%.
The market is being underpinned primarily by comments from a key OPEC+ panel that called for better compliance with oil output cuts against the backdrop of falling crude prices. WTI is on track to rise over 10% this week.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart, however, momentum has shifted to the upside. A trade through $44.33 will change the main trend to up. A move through $37.11 will signal a resumption of the downtrend.
Momentum shifted to the upside earlier in the week when the market took out $39.22, confirming a closing price reversal bottom.
The short-term range is $44.33 to $37.11. The market is currently trading on the strong side of its retracement zone at $41.57 to $40.72, making it support.
On the upside, the major resistance is the long-term 50% level at $42.41.
If $37.11 to $42.02 becomes a trading range then its retracement zone at $39.57 to $38.99 will become the primary downside target.
Based on the early price action, the direction of the December WTI crude oil market into the close is likely to be determined by trader reaction to the short-term Fibonacci level at $41.57.
A sustained move over $41.57 will indicate the presence of buyers. Taking out the intraday high at $42.02 will indicate the buying is getting stronger. This could trigger a further rally into the major 50% level at $42.41.
A sustained move under $41.57 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the short-term 50% level at $40.72.
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