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Crude Oil Price Update – Strengthens Over $47.29, Weakens Under $46.04

James Hyerczyk
·2 min read

U.S. West Texas Intermediate crude oil futures plunged more than 4% in early trading on Monday as a fast-spreading new coronavirus strain that has shut down much of the U.K. and led to tighter restrictions in Europe sparked worries about a slower recovery in fuel demand.

The news of a new coronavirus strain in Britain overshadowed a $900 billion stimulus bill passed Sunday night and the rollout of the Moderna vaccine.

At 21:22 GMT, February WTI crude oil is trading $47.76, down $1.48 or -3.01%.

“Reports of a new strain of the coronavirus has weighed on risk sentiment and oil. New mobility restrictions across Europe are also not helping as European oil demand will suffer,” said UBS oil analyst Giovanni Staunovo.

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. A move through $45.14 will change the main trend to down.

The minor range is $45.14 to $49.43. After the initial plunge on Monday, the market straddled its 50% level at $47.29 the rest of the session.

The major support is the long-term Fibonacci level at $46.04.

Daily Swing Chart Technical Forecast

Based on Monday’s price action, the key level to watch into the late session close is likely to be determined by trader reaction to $47.29.

Bullish Scenario

A sustained move over $47.29 will indicate the presence of buyers. If this move can create enough upside momentum then look for a retest of $49.43. Taking out this level will signal a resumption of the uptrend.

Bearish Scenario

A sustained move under $47.29 will signal the presence of sellers. The first downside target is the major Fibonacci level at $46.04. A failure to hold this level will indicate the selling pressure is getting stronger. This could eventually trigger breakdowns under the main bottoms at $45.14 and $44.10, leading to an acceleration to the downside.

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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