Crude Oil Price Update – Trading Inside Triangle, Retracement Zone Indicates Impending Volatility

April West Texas Intermediate crude oil futures are trading slightly lower after giving back all of its earlier gains. The early session rally was fueled by a weaker dollar, firmer equity markets and positive comments from a Saudi official.  Prices slipped on concerns over rising U.S. production.

Some traders are also saying yesterday’s rally may have been an overreaction to the U.S. Energy Information Administration’s inventories report which showed a smaller than expected draw down.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $57.90 will signal a resumption of the downtrend.

The market is currently straddling a retracement zone at $61.20 to $59.98. This zone is controlling the near-term direction of the market.

The short-term range is $66.00 to $57.90. Its retracement zone at $61.95 to $62.91 is resistance and the primary upside target.

Daily Technical Forecast

Based on the early trade, the direction of the crude oil market today is likely to be determined by trader reaction to the uptrending Gann angle at $59.90 and the downtrending Gann angle at $61.50.

Holding inside the downtrending Gann angle at $61.50 and the 50% level at $61.20 will signal the presence of sellers.

Overtaking $61.50 could trigger a surge into $61.95.

Holding above the Fib level at $59.98 and the uptrending Gann angle at $59.90 will indicate the presence of buyers.

The Gann angle at $59.90 is also the trigger point for an acceleration to the downside with the next target angle coming in at $58.90.