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Crude Oil Price Update – $46.04 Fibonacci Level Once Again Proves to be Key Support

James Hyerczyk
·2 min read

U.S. West Texas Intermediate crude oil futures jumped more than 2% on Wednesday, boosted by lower U.S. inventories of crude, gasoline and distillates which raised investor hopes for a return in fuel demand.

A weaker U.S. Dollar also support prices. A weak greenback tends to drive up foreign demand for dollar-denominated commodities like crude oil.

At 17:48 GMT, February WTI crude oil is trading $48.09, up $1.07 or +2.28%.

In other news, the number of Americans filing first-time unemployment benefits fell unexpectedly last week, but remained high as more businesses faced restrictions and consumers curled up in the face of the increase in COVID-19 cases.

Daily February WTI Crude Oil
Daily February WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $49.43 will signal a resumption of the uptrend. The main trend will change to down on a move through $45.14.

The major support is a long-term Fibonacci level at $46.04. Today’s selling stopped at $46.16.

The minor range is $49.43 to $46.16. The market is currently straddling its 50% level at $47.80.

Daily Swing Chart Technical Forecast

The direction of the market into the close is likely to be determined by trader reaction to $47.80.

Bullish Scenario

A sustained move over $47.80 will indicate the presence of buyers. If this generates enough upside momentum then look for a possible retest of the main top at $49.43.

Bearish Scenario

A sustained move under $47.80 will signal the presence of sellers. The next potential downside targets are $46.16 and $46.04.

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

This article was originally posted on FX Empire

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