Crude Oil Price Update – Trading Inside Major Retracement Zone

March West Texas Intermediate crude oil futures are trading lower on Thursday. The catalyst behind the move is the Energy Information Administration’s weekly inventories report that showed U.S. crude output had reached record highs and the reopening of the North Sea’s Forties pipeline that reopened following an outage.

In other news, investors in crude are still sitting on one of the largest bullish positions in history. Money managers own more than 1 billion barrels of crude oil through their holdings of U.S. and Brent futures and options.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The market is not in a position to change the trend to up. It’s currently down 10 days since the $66.66 top and 4 days since the $66.30 top.

Crude oil dropped dramatically when it crossed to the weak side of a major 50% level at $64.11. This price is now resistance.

The main range is $56.07 to $66.66. Its retracement zone at $61.37 to $60.12 is currently being tested. Trader reaction to this zone will determine the longer-term direction of the market.

Daily Technical Forecast

Based on the early trade, the direction of the market the rest of the session will be determined by trader reaction to the 50% level at $61.37.

A sustained move under $61.37 will signal the presence of sellers. This could trigger a break into an uptrending angle at $60.70. If this angle fails then look for a move into the Fibonacci level at $60.12.

A sustained move over $61.37 will indicate the presence of buyers. This could lead to a labored rally with potential resistance angles coming in at $61.66 and $62.30. Momentum could shift to the upside, but not the trend, on a move through $62.30.