Crude Oil Price Update – Buyers Are Looking for Value
October West Texas Intermediate crude oil futures are trading lower shortly before the cash market opening. The market is also trading inside Friday’s range which suggests investor indecision and impending volatility.
Bullish traders are supporting the market because of increased demand and declining inventories. Bearish traders are pressuring prices because of increasing output and concerns over compliance with OPEC’s plan to reduce output, trim the global supply and stabilize prices. The stronger U.S. Dollar is also weighing on prices today.
Technical Analysis
The main trend is up according to the daily swing chart. However, momentum is trending lower due to the potentially bearish closing price reversal top at $50.51 and $50.35.
A trade through $50.51 will signal a resumption of the uptrend. A move through $45.58 will change the main trend to down.
The short-term range is $45.58 to $50.51. Its retracement zone is at $48.04 to $47.46 is the first downside target. The main range is $44.01 to $50.51. Its retracement zone at $47.26 to $46.49 is the primary downside target.
The combination of these two retracement zones makes $47.46 to $47.26 a key downside target.
A pair of uptrending angles passes through these zones at $47.46 and $47.14, making them valid downside targets.
Forecast
Based on the current price at $48.73, the first upside target is a pair of angles at $49.33 and $49.39. Overtaking $49.39 will indicate the buying is getting stronger. This could lead to a test of the next downtrending angle at $49.95.
If the selling pressure continues then look for a test of the short-term 50% level at $48.04. Since the main trend is up, we could see a technical bounce on the first test. If it fails then look for the selling to extend into the support cluster at $47.46. Buyers are likely to show up on a test of this price cluster.
This article was originally posted on FX Empire
