WTI Crude Oil

Crude Oil Price Update -Weekly Reversal Top Possible with $55.15 – $54.30 Next Target Zone

U.S. West Texas Intermediate crude oil futures are trading lower for a second session on Friday, retreating from a more than one-year high after OPEC again lowered its demand forecast and the International Energy Agency said the market was still over-supplied.

At 09:51 GMT, April WTI crude oil futures are trading $57.62, down $0.52 or -0.89%.

Oil demand around the world in 2021 will recover more slowly than earlier thought, the Organization of the Petroleum Exporting Countries (OPEC) said.

Previously, the International Energy Agency (IEA) said oil supply was still outstripping demand globally, although COVID-19 vaccines are expected to help demand recovery.

Daily April WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $58.77 will signal a resumption of the uptrend. The main trend is safe for now. It will change to down on a move through $51.53.

The short-term range is $51.53 to $58.77. Its 50% to 61.8% retracement zone at $55.15 to $54.30 is the primary downside target.

Daily Swing Chart Technical Forecast

We’re not too worried about a change in trend on the daily chart, but we do acknowledge the market is a little top heavy. Furthermore, the daily chart indicates there is plenty of room to the downside with $55.15 to $54.30 the next likely target. Since the main trend is up, buyers are likely to come in on a test of this area.

The first leg down is usually long liquidation. On the next move up, aggressive counter-trend traders are likely to show up in an effort to form a potentially bearish secondary lower top. You’ll probably recognize the move because traders will form an “M” pattern.

The key level to watch is the February 5 close at $56.70. Closing under this level will form a weekly closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 week correction with $55.15 to $54.30 the first target.

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Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.