Crude Oil Price Update – Trader Reaction to $65.57 Sets the Tone; Ripe for Closing Price Reversal Bottom
U.S. West Texas Intermediate crude oil futures are trading sharply lower on Thursday as traders await OPEC+’s output policy decision amid growing fears over omicron COVID variant. Prices were also pressured as the Biden administration tightened travel rules to and within the U.S., requiring all in-bound international passengers to test for COVID within 24 hours of departure.
Meanwhile, OPEC and non-OPEC oil producers, an influential group known as OPEC+, will meet later today to decide on the next phase of output policy.
Traders broadly expect OPEC+ to push ahead with its current plan to hike monthly output by 400,000 barrels per day. However, there are some worries whether the group may be tempted to take a pause to assess the market following a period of heightened price volatility.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through the intraday low at $62.43 will signal a resumption of the downtrend. A trade through the $60.77 main bottom will reaffirm the downtrend.
A move through $79.23 will change the main trend to up. This is highly unlikely, but the market is in a position to post a potentially bullish closing price reversal bottom.
On the downside, the support is a pair of 50% levels at $61.04 and $57.93. On the upside, the primary target is the retracement zone at $70.83 to $72.81.
Daily Swing Chart Technical Forecast
The direction of the January WTI crude oil futures market into the close on Thursday will be determined by trader reaction to $65.57.
A sustained move under $65.57 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to extend into $62.43, followed by $61.04 and $60.77.
The main bottom at $60.77 is a potential trigger point for an acceleration into $57.93, followed by $55.30.
A sustained move over $65.57 will signal the presence of buyers. If this generates enough upside momentum then we could see a surge into the minor retracement zone at $70.83 to $72.81. Since the main trend is down, sellers could come in on a test of this area.