Crude Oil Price Update – Trader Reaction to $57.65 Will Determine Direction

February West Texas Intermediate Crude Oil futures are trading higher shortly after the regular session opening. All of the gains took place during the pre-market session. Buyers are reacting to last week’s drop in U.S. producing oil rigs. They anticipate that this may lead to lower U.S. production.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $58.60 will change the main trend to up. This could lead to a fast rally into the next main top at $58.90.

A move through $56.11 will signal a resumption of the downtrend. This could lead to a test of the next main bottom at $55.88.

The major support is a long-term 50% level at $57.07. This price is acting like a long-term pivot. Trading above this today is helping to give the market an upside bias.

The short-term range is $58.60 to $56.11. Its retracement zone at $57.36 to $57.65 is currently being tested. Momentum will shift to the upside on a sustained move over $57.65.

Daily Technical Forecast

Based on the early trade, the direction of the crude oil market the rest of the session is likely to be determined by trader reaction to the short-term Fibonacci level at $57.65.

A sustained move over $57.65 will indicate the presence of buyers. This could trigger an acceleration to the upside with the first target angle at $58.10.

A sustained move under $57.65 will signal the presence of sellers. Crossing to the weak side of a downtrending Gann angle at $57.60 will indicate the selling is getting stronger. This could lead to a retest of the 50% level at $57.36. This level provided support earlier today.

If $57.36 fails as support then look for the selling to extend into a steep uptrending Gann angle at $57.11, followed by the major pivot at $57.07.