FXEMPIRE
All
Ad
Corona Virus
Stay Safe, FollowGuidance
World
44,787,418Confirmed
1,179,410Deaths
32,740,775Recovered
Fetching Location Data…
Advertisement
Advertisement
James Hyerczyk
WTI Crude Oil

U.S. West Texas Intermediate crude oil futures slid more than 6% towards $37.00 a barrel on Tuesday, its 5th session of decline, pressured by concerns that a recovery in demand could weaken as coronavirus infections flare up around the world. Both WTI and Brent have dropped out of the ranges they were trading in throughout August. The bottom of these ranges are new resistance.

At 11:45 GMT, October WTI crude oil is trading $37.31, down $2.46 or -6.19%.

The drivers of the weakness on Tuesday are a jump in COVID-19 cases and a price cut by Saudi Arabia. The OPEC+ production cuts should eventually provide a floor for the market, but today’s price action suggests we haven’t hit that level yet. Prices will continue to fall until they hit a value zone, attractive enough to bring in new buyers.

Daily October WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down last week when sellers took out the main bottom at $41.46. It was reaffirmed when bottoms at $39.00 and $37.56 failed to hold. Previous bottoms could become new resistance.

Due to the prolonged move down in terms of price and time, the best chart pattern to signal short-term support has been reached will be a closing price reversal bottom.

The short-term range is $32.66 to $43.78. The market is currently testing its retracement zone at $38.22 to $36.91. Aggressive counter-trend buyers could come in on a test of this zone, but if it fails, there could be another acceleration to the downside with the main bottom at $35.25 the next target.

The main range is $23.26 to $43.78. Its 50% to 61.8% retracement zone at $33.52 to $31.10 is the best downside target and value zone.

Advertisement

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at $37.31, the direction of the October WTI crude oil market the rest of the session on Tuesday is likely to be determined by trader reaction to the short-term Fibonacci level at $36.91.

Bearish Scenario

A sustained move under $36.91 will indicate the presence of sellers. This could trigger an acceleration to the downside with the next target the main bottom at $35.25.

A failure to hold $35.25 will indicate the selling is getting stronger. This could extend the break into main 50% level at $33.52.

Bullish Scenario

Holding $36.91 will indicate the selling is slowing down or the counter-trend buying is getting a little stronger. If this creates enough upside momentum then look for the intraday rally to possibly extend into the short-term 50% level at $38.22. The short-covering rally will pick up steam on a move over $38.22.

For a look at all of today’s economic events, check out our economic calendar.
Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US