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Crude Oil Update – Rangebound Ahead of Weekly Inventories Report

10 days agoByJames Hyerczyk

March West Texas Intermediate Crude Oil futures are trading slightly better shortly before the regular session opening. There was no follow-through to the downside after yesterday’s second consecutive steep sell-off. The market is trading inside yesterday’s range. This suggests investor indecision and impending volatility

The indecision is in reaction to today’s U.S. Energy Information Administration weekly inventories report and President-elect Donald Trump’s first press conference since the November election.

daily-march-wti-crude-oil
Daily March West Texas Intermediate Crude Oil

Technical Analysis

The main trend is down according to the daily swing chart.

The main range is $46.62 to $56.24. Its retracement zone at $51.43 to $50.29 is the primary downside target. We could see a technical bounce on the first test of this zone. It could be caused by aggressive counter-trend buying, short-covering or profit-taking.

If $56.18 to $51.59 becomes the new short-term range then its retracement zone at $53.89 to $54.43 will become the primary upside target.

Forecast

Based on the current price at $51.85 and the earlier price action, the direction of March WTI Crude oil today will be determined by trader reaction to the major 50% level at $51.43.

A sustained move over $51.43 will indicate the presence of buyers. If upside momentum builds then look for a possible rally into the nearest downtrending angle at $53.18. This is the trigger point for a possible acceleration into the short-term 50% level at $53.89.

If $51.43 fails to hold as support then look for a possible acceleration to the downside with the next targets coming in at $50.29 and $50.25.

Look for volatility after the release of the EIA report at 1530 GMT and during Trump’s press conference which is expected to start at 1600 GMT.