Crude Oil Price Update – Trader Reaction to Pivot at $57.40 Will Determine Direction Today

January West Texas Intermediate Crude Oil futures are trading higher on Monday, supported by tensions in the Middle East.

In other news, OPEC raised its forecast on Monday for demand for its oil in 2018 and said its deal with other major producers to cut production is helping to reduce inventory. Hedge funds also increased their holdings of Brent futures and options in the latest week to the highest on record.

Finally, The United Arab Emirates’ energy minister on Monday said he expects OPEC and non-OPEC countries to extend their deal at the meeting on November 30.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum shifted to the downside with the formation of the closing price reversal top on November 8.

A trade through $58.14 will negate the chart pattern and signal a resumption of the uptrend.

A move through $56.65 will confirm the chart pattern. This could trigger a 2 to 3 day break into the main retracement zone.

The short-term range is $58.14 to $56.65. Its 50% level or pivot is $57.40. This level is controlling the short-term direction of the market.

The main range is $51.09 to $58.14. Its retracement zone at $54.62 to $53.78 is the primary downside target.

Daily Technical Forecast

Based on the early price action, the direction of the market today is likely to be determined by trader reaction to the pivot at $57.40.

A sustained move over $57.40 will indicate the presence of buyers. This could create the upside momentum to challenge $58.14.

A sustained move under $57.40 will signal the presence of sellers. This could drive the market into $56.65.

The market could open up under $56.65 with the next target angle coming in at $55.09. This is followed by a 50% level at $54.62.