Crude Oil Price Update – Trader Reaction to $45.65 Will Determine Direction Today

August crude oil futures are trading slightly better as investors await today’s weekly inventories report from the U.S. Energy Information Administration. The EIA report is expected to show a 3.2 million barrel draw. Today’s early rally is a follow-through move in reaction to late Tuesday’s bullish inventories report from the American Petroleum Institute.

Technical Analysis

The main trend is up according to the daily swing chart. The new main bottom is $43.65. This is also the first secondary higher bottom since the multi-month low at $42.05 on June 21. This is significant because new buyers typically come in on this move.

A trade through $47.32 will reaffirm the uptrend. A move through $43.65 will change the main trend to down.

The main range is $42.05 to $47.32. Its retracement zone at $44.69 to $44.06 is the new support zone.

The short-term range is $47.32 to $43.65. Its retracement zone at $45.40 to $45.92 is currently being tested. This zone is very important to the structure of the market.

A sustained move over this range will indicate the presence of buyers. This could create enough upside momentum to trigger a rally into the $47.32 main top.

A sustained move under $45.40 will signal the presence of sellers. They are going to try to form a potentially bearish secondary lower top.

Forecast

Based on the current price at $45.72, the direction of crude oil today is likely to be determined by trader reaction to a steep uptrending angle at $45.65.

A sustained move over $45.65 will signal the presence of buyers.

Taking out the Fib level at $45.92 will indicate the buying is getting stronger. Look for an acceleration to the upside if buyer can take out the downtrending angle at $46.07. This could trigger an acceleration into additional angles at $46.70 and $47.01. The latter is the last potential resistance angle before the $47.32 main top.

A sustained move under $45.65 will signal the presence of sellers. This could lead to a test of the 50% level at $45.40.

Look out to the downside if $45.40 fails as support since the next target is $44.65.