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James Hyerczyk
Crude Oil
Crude Oil

U.S. West Texas Intermediate crude oil futures are trading sharply lower on Thursday after investors shifted their focus on the risk that emerging market crises and trade disputes will eventually lead to lower demand even in the midst of tightening supply.

At 1841 GMT, November WTI crude oil futures are trading $68.60, down $1.56 or -2.23%.

Daily October WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $70.98 will signal a resumption of the uptrend. The main trend will change to down on a move through $66.67.

The main range is $63.69 to $70.98. Its 50% to 61.8% retracement zone is $67.34 to $66.47. This zone is the major support. It stopped the selling on September 7 at $66.67.

The short-term range is $66.67 to $70.89. Its retracement zone at $68.78 to $68.28 is currently being tested. This zone is controlling the near-term direction of the market. This zone has to hold as support, or momentum will start to shift to the downside.

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Daily Swing Chart Technical Forecast

Based on the price action late in the session, the direction of the November WTI crude oil futures contract the rest of the session is likely to be determined by trader reaction to the 50% level at $68.78 and the 61.8% level at $68.28.

A sustained move over $68.78 will indicate the presence of buyers. This could lead to a higher opening on Friday.

A sustained move under $68.28 will signal the presence of sellers. If this move generates enough downside momentum, we could see an acceleration into the main 50% level at $67.34 on Friday. Depending on the selling volume, we could even see the move extend into the main bottom at $66.67 and the Fibonacci level at $66.47.

An early peek at the chart strongly indicates that the tone of the market on Friday will be determined by trader reaction to the short-term retracement zone at $68.78 to $68.28.

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