U.S. West Texas Intermediate crude oil is trading slightly higher Thursday after recovering from early session weakness. Traders are positioning themselves ahead of the start of the OPEC meeting in Vienna and the release of the U.S. Energy Information Administration’s (EIA) weekly inventories report. At the meeting, OPEC and its major ally Russia, are expected to agree upon production cuts in the range of 1.0 to 1.4 million barrels per day. The EIA report is expected to show a 1.3 million barrel build.
At 0743 GMT, January WTI crude oil is trading $53.02, up $0.13 or +0.25%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through $54.55 will reaffirm the uptrend. A move through $49.41 will change the main trend to down.
The short-term range is $49.41 to $54.55. Its 50% level or pivot at $51.98 is support. It is also controlling the near-term direction of the market.
The main resistance is a long-term Fibonacci level at $54.79. The next resistance is the 50% level at $58.95.
Daily Swing Chart Technical Forecast
Based on the early price action, the direction of the January WTI crude oil futures contract on Thursday is likely to be determined by trader reaction to the short-term pivot at $51.98.
A sustained move over $51.98 will indicate the presence of buyers. If this move can create enough upside momentum then look for the rally to extend into the main top at $54.55, followed closely by the Fibonacci level at $54.79. The latter is a potential trigger point for an acceleration to the upside.
The daily chart indicates there is plenty of room to the upside over $54.79 with $58.95 the next major upside target.
A failure to hold $51.98 will signal the presence of sellers. This could trigger a spike to the downside with $49.41 the next target. If this main bottom is taken out, the main trend will change to down with the next target the August 16, 2017 main bottom at $47.96.
This article was originally posted on FX Empire
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