U.S. West Texas Intermediate crude oil futures are trading higher early Wednesday on position-squaring ahead of the start of a meeting of OPEC and its allies to discuss whether to extend production cuts to support the market and trim global inventories. The market is also being underpinned by an industry report that showed U.S. crude stockpiles fell more than expected.
At 06:44 GMT, January WTI crude oil futures are trading $56.56, up $0.46 or +0.81%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through $54.85 will change the main trend to down. A move through $58.74 will signal a resumption of the uptrend.
This week’s price action is being controlled by a series of retracement levels.
The main range is $61.48 to $50.69. Its retracement zone at $56.29 to $57.36 is controlling the longer-term direction of the market.
The short-term retracement zone is $53.84 to $58.74. Its retracement zone comes in at $56.29 to $55.71.
The intermediate range is $50.69 to $58.74. Its retracement zone at $54.72 to $53.77 is support.
Daily Swing Chart Technical Forecast
Based on the early price action and the current price at $56.56, the direction of the January WTI crude oil futures contract the rest of the session on Wednesday is likely to be determined by trader reaction to the 50% level at $56.29.
A sustained move over $56.29 will indicate the presence of buyers. If this can create enough upside momentum then look for a potential rally into the main Fibonacci level at $57.36. This is a potential trigger point for an acceleration to the upside.
A sustained move under $56.29 will signal the presence of sellers. The first two downside targets are $56.08 and $55.71.
The short-term Fibonacci level at $55.71 is a potential trigger point for an acceleration to the downside with the next targets the main bottom at $54.85 and the 50% level at $54.72.
Today’s Energy Information Administration (EIA) report could produce some volatility. However, the price action may be limited ahead of the OPEC meeting on December 5-6.
This article was originally posted on FX Empire
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