Crude Oil Price Update – Trader Reaction to $56.62 Will Set Tone Today

U.S. West Texas Intermediate crude oil futures are trading mixed on Tuesday, while hovering just slightly below its highest level since November 21. The two-sided price action suggests investor indecision amid new concerns over future demand due to the slowing global economy and continued worries over U.S.-China trade relations. Despite the developing uncertainty, prices remain underpinned by the OPEC-led production cuts that have put a small dent in global supplies.

At 13:16 GMT, April WTI crude oil is trading $56.54, up $0.56 or +1.00%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $56.73 will signal a resumption of the uptrend. The main trend will change to down on a move through $51.62.

The minor trend is up. A move through $53.51 will change the minor trend to down. This will shift momentum to the downside.

The primary upside target is the long-term 50% level at $59.51.

Daily Technical Forecast

Based on the early price action, the direction of the April WTI crude oil futures contract the rest of the session is likely to be determined by trader reaction to the steep uptrending Gann angle at $56.62.

Bullish Scenario

A sustained move over $56.62 will indicate the presence of buyers. This will also put the market in a bullish position with the next major target coming in at $59.51. The Gann angle the market is following higher has been moving up by $1.00 per day since the $51.62 main bottom on February 11. If the market continues to follow this angle higher then we could see a test of $59.51 before the end of the week.

Bearish Scenario

The inability to sustain a rally over $56.62 will signal the presence of sellers. If this move creates enough downside momentum then we could see the start of a pullback into the next uptrending Gann angle at $54.12.