Crude Oil Price Update – Weekly Chart Strengthens Over $59.63, Weakens Under $57.87

Last week, West Texas Intermediate crude oil futures rallied to their highest level since the week-ending November 16 then fought to hold on to those early gains late in the week. The market continued to be supported by the OPEC-led supply cuts, however, concerns over future demand due to a weakening global economy put a cap on those gains and nearly turned the market lower for the week.

May U.S. WTI crude oil futures settled the week at $59.04, up $0.22 or +0.37%.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. A trade through $60.39 will signal a resumption of the uptrend. The main trend will change to down on a trade through $54.87.

The main range is $75.80 to $43.46. Its retracement zone at $59.63 to $63.45 is resistance. This zone is controlling the longer-term direction of the market. Last week’s high at $60.39 was formed inside this zone.

The short-term range is $43.46 to $60.39. If the main trend changes to down then its retracement zone at $51.93 to $49.93 will become the primary downside target.

Weekly Technical Forecast

Based on last week’s close at $59.04 and price action, the direction of the May U.S. WTI crude oil futures contract this week is likely to be determined by trader reaction to the main 50% level at $59.63.

Bullish Scenario

A sustained move over $59.63 will indicate the presence of buyers. The first target is last week’s high at $60.39. This is a potential trigger point for an acceleration into a resistance cluster at $63.30 to $63.45.

Bearish Scenario

The inability to overcome $59.63 will signal the presence of sellers. The first target is a short-term uptrending Gann angle at $57.87. If this fails then look for the selling to extend into another uptrending Gann angle at $56.46.

Start preparing for a steep break if $56.46 fails as support. This could lead to a quick break into the main bottom at $54.87. Taking out this bottom will change the main trend to down. If sellers increase pressure then look for the break to possibly extend into a 50% level at $51.93.

Basically, look for an upside bias on a sustained move over $59.63, and for downside momentum under $59.46