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Crude Oil Price Update – Direction Determined by Trader Reaction to $57.36 Fibonacci Level

James Hyerczyk

U.S. West Texas Intermediate crude oil futures are edging higher shortly before the release of the U.S. Energy Information Administration (EIA) weekly inventories report at 16:00 GMT. The report is expected to show a build of 1.5 million barrels.

The market is being underpinned on Thursday by yesterday’s American Petroleum Institute (API) weekly inventories report, which showed an unexpected drop in U.S. crude inventories. Comments from an OPEC official about lower-than-expected U.S. production in 2020 also provided some support.

At 15:45 GMT, January West Texas Intermediate crude oil futures are trading $57.72, up $0.52 or +0.91%.

Daily January WTI Crude Oil

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $57.87 will signal a resumption of the uptrend. The main trend will change to down on a trade through $55.77.

The minor trend is also up. A trade through $56.27 will change the minor trend to down. This will shift momentum to the downside.

The main range is $61.48 to $50.69. Bullish traders are trying to establish support on the strong side of its retracement zone at $57.36 to $56.08.

The short-term range is $57.87 to $53.84. Its retracement zone at $55.86 to $55.38 is additional support.

Daily Technical Forecast

Based on the early price action and the current price at $57.72, the direction of the January WTI Crude oil futures contract the rest of the session on Thursday is likely to be determined by trader reaction to the main Fibonacci level at $57.36.

Bullish Scenario

A sustained move over $57.36 will indicate the presence of buyers. Overcoming the main top at $57.87 and the uptrending Gann angle at $58.19 will indicate the buying is getting stronger. This could trigger a rally into the downtrending Gann angle at $58.79.

Bearish Scenario

A sustained move under $57.36 will signal the presence of sellers. This could trigger an acceleration to the downside with the first target angle coming in at $56.34.

This article was originally posted on FX Empire