Crude Oil Price Update – Taking Out $45.28 Changes Trend to Up
August West Texas Intermediate crude oil futures are trading flat shortly before the U.S. Energy Information Administration’s weekly inventories report. The price action suggests that trader believe the report will show a draw of about 2.1 million barrels. Late Tuesday, the American Petroleum Institute’s report showed a surprise build so traders have to be ready for a possible two-sided trade.
Technical Analysis
The main trend is down according to the daily swing chart. The trend will turn up on a trade through the last main top at $45.28.
The market is currently having trouble with an old bottom at $44.45 from May 5. Sometimes old bottoms become new tops.
On the downside, the first support is a 50% level at $43.67. The next support is a 50% level at $43.25. If this market is going higher, then the market must establish support at these levels.
A pair of Gann angles also pass through the zone created by the two 50% levels at $43.53 and $43.30, making them valid downside targets also.
Forecast
Based on the current price at $44.25, the direction of the crude oil market today will be determined by trader reaction to yesterday’s high at $44.44.
A sustained move over $44.44 will indicate the presence of buyers. This could drive crude oil into an uptrending angle at $44.55 and a downtrending angle at $44.84. The latter is the last potential resistance angle before the $45.28 main top.
Taking out $45.28 will change the main trend to up and could trigger the start of an acceleration to the upside with the next major target angle coming in at $46.47.
A failure to overcome or sustain a rally over $44.44 will signal the presence of sellers. This could trigger an intraday sell-off into $43.67, followed by $45.53, $43.30 and $43.25.
There are many upside targets and downside targets to overcome so I suspect we’re going to see a range bound trade unless the report is bullish enough to takeout $44.44 with conviction.
This article was originally posted on FX Empire
