Crude Oil Price Update – Trader Reaction to $53.26 Will Set Tone Ahead of API Inventories ReportThe direction of the March WTI crude oil market into the close will be determined by trader reaction to $53.26.
U.S. West Texas Intermediate crude oil futures inched up to a 10-month high on Tuesday, helped by a lower U.S. Dollar. A strong technical uptrend is also encouraging investors to add to a winning position, while the market remains underpinned by Saudi Arabia’s decision to trim a million barrels from its daily output in February and March.
Traders now await the release of the latest weekly inventories data from the American Petroleum Institute (API) at 21:30 GMT. The report is expected to show a 2.7 million barrel drawdown. The price action also suggests that investors may be shrugging off renewed concerns about global fuel demand amid strict coronavirus lockdowns in Europe and new movement restrictions in China.
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At 18:08 GMT, March WTI crude oil futures are trading $53.01, up $0.74 or +1.42%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend resumed when buyers took out yesterday’s high. A trade through $53.26 will reaffirm the uptrend. The main trend will change to down on a move through $47.31.
Wednesday will be the seventh day up from the last swing bottom at $47.31, which will put the market inside the window of time for a closing price reversal top.
The minor range is $47.31 to $53.27. Its 50% level at $50.29 is potential support. This level will move up as prices move higher.
Daily Swing Chart Technical Forecast
The direction of the March WTI crude oil market into the close will be determined by trader reaction to $53.26.
A sustained move over $53.26 will indicate the presence of buyers. This move could trigger an acceleration to the upside, or the start of a slow grind. No matter how buyers decide to play it, the new upside target will remain the January 8, 2020 main top at $57.41.
A sustained move under $53.26 will signal the presence of sellers. If this move is able to generate enough downside momentum then look for a possible break into the minor 50% level at $50.29.
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