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WTI Oil Strengthens Over $111.45, Weakens Under $106.43

By:
James Hyerczyk
Updated: Mar 4, 2022, 12:48 UTC

The direction of the April WTI crude oil futures contract is likely to be determined by trader reaction to $111.45 and $106.43.

WTI Crude Oil

In this article:

U.S. West Texas Intermediate crude oil futures are edging higher on Friday after failing to confirm yesterday’s potentially bearish closing price reversal top.

The volatility is being fueled by fears over a disruption to Russian oil exports in the face of Western sanctions, which would support higher prices, and the prospect of more Iranian supplies in the event of a nuclear deal with Tehran, which could provide short-term relief to higher prices.

At 12:24 GMT, April WTI crude oil futures are trading $110.36, up $2.69 or +2.50%. On Thursday, the United States Oil Fund ETF (USO) settled at $74.56, down $0.86 or -1.14%.

The Russian attack on Ukraine will remain the focus for months to come which means that concerns over supply will remain at the forefront. This means prices are likely to remain at elevated levels, which will put pressure on the government to revive the Iranian nuclear deal.

Daily April WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, Thursday’s closing price reversal top suggests upside momentum may be losing a little steam because of valuation worries.

A trade through $106.43 will confirm the closing price reversal top, which could trigger the start of a 2 to 3 day correction, but not necessarily lead to a change in the trend. A move through $116.57 will negate the chart pattern and signal the resumption of the uptrend. The main trend will change to down on a trade through $87.46.

On the upside, the nearest resistance is a long-term 50% level at $111.45. The next potential resistance level is a Fibonacci level at $136.92, which means there is plenty of room to the upside to extend the rally.

On the downside, the nearest support is a minor pivot at $103.32, followed by a short-term retracement zone at $102.02 to $98.58. Since the main trend is up, buyers are likely to come in on a test of this area.

Daily Swing Chart Technical Forecast

The direction of the April WTI crude oil futures contract is likely to be determined by trader reaction to $111.45 and $106.43.

Bullish Scenario

A sustained move over $111.45 will indicate the presence of buyers. If this creates enough upside momentum then look for the buying to possibly extend into $116.57.

Taking out $116.57 will reaffirm the uptrend. This could trigger an acceleration to the upside with the long-term Fibonacci level at $136.92 the next major target.

Bearish Scenario

A sustained move under $106.43 will signal the presence of sellers. This could lead to a quick break into $103.32 to $98.58. Look for buyers to come in on a test of this area. The uptrend will be threatened if $98.58 fails as support.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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