Crude Oil Price Update – Watch Price Action, Order Flow at $47.14

August West Texas Intermediate crude oil futures are trading lower in today’s limited trading session. With the U.S. on holiday, and the trading session limited and shortened, most traders aren’t paying attention to today’s price action. Therefore, we’re going to take a look at the weekly chart. This analysis should be used as a reference the rest of the week.

Technical Analysis

The main trend is down according to the weekly swing chart. The trend will change to up on a trade through $52.22. A move through $42.05 will signal a resumption of the downtrend. What’s been taking place the last two weeks has been a counter-trend rally.

The main range is $52.22 to $42.05. Its retracement zone at $47.14 to $48.34 is the primary upside target. The lower or 50% level of this range was tested on Monday.

Forecast

Based on the current price at $46.94, the direction of the crude oil market the rest of the week will be determined by trader reaction to the 50% level at $47.14.

A sustained move under $47.14 will indicate that sellers are coming in to defend the trend. This could drive the market into a pair of Gann angles at $46.22 and $46.05. Crossing to the weak side of the angle at $46.05 will indicate the selling is getting stronger. This could trigger a steep break into the uptrending angle at $44.05.

A sustained move over $47.14 will signal the presence of buyers. This could trigger an acceleration to the upside with the next targets the Fibonacci level at $48.34 and a downtrending angle at $49.22.

Watch the price action and read the order flow at $47.14 all week. Trader reaction to this level will tell us if the buying is getting stronger or if sellers are retaking control.