Crude Oil Price Update – Trigger Point for Upside Acceleration is $56.17

U.S. West Texas Intermediate crude oil futures are trading slightly lower Monday. The early weakness suggests buyers are taking a cautious approach in light of the uncertainty surrounding U.S.-China trade relations.  Perhaps keeping a lid on prices are worries over demand due to evidence of a global economic slowdown. However, the market is clearly being underpinned by the OPEC-led production cuts that are helping to trim the global supply glut and stabilize prices. Support is also being provided by the sanctions against Venezuela and another cut in the number of U.S. oil rigs.

At 07:22 GMT, March WTI crude oil is trading $55.23, down $0.03 or -0.05%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $55.66 will signal a resumption of the uptrend. The main trend will change to down on a trade through $51.33.

On the upside, the main target is the 50% level at $59.48.

Daily Technical Forecast

Based on the early price action, the direction of the March WTI crude oil futures contract is likely to be determined by trader reaction to the long-term downtrending Gann angle at $55.29.

Bullish Scenario

A sustained move over $55.29 will indicate the presence of buyers. This could trigger a rally into the uptrending Gann angle at $56.17.

Overcoming $56.17 will indicate the buying is getting stronger. The daily chart shows there is plenty of room to the upside so don’t be surprised by an acceleration to the upside. The main upside target is $59.48.

Bearish Scenario

A sustained move under $55.29 will signal the presence of sellers. If this creates enough downside momentum then look for a potential break into the short-term uptrending Gann angle at $53.83. Since the main trend is up, look for buyers on the first test of this angle. It provided support on Friday at $53.37.

If the angle fails as support then look for the selling to continue into the next uptrending Gann angle at $52.58. This is the last potential support angle before the $51.33 main bottom.