Crude Oil Price Update – Short-Term Momentum Turns Lower On Close Under $63.91
March West Texas Intermediate Crude Oil futures are trading lower shortly before the regular session opening. The market started out steady, underpinned by reports of a tightening market. On the supply side, the market was enjoying the benefits of the OPEC-led production cuts. Signs of increased demand due to the strong global economic recovery were also providing support.
Those are solid long-term fundamentals that could provide support throughout the year. However, we’re looking at the short-term and the current price action suggests the market may be ripe for a near-term correction.
Lately, the market has been primarily driven by aggressive hedge fund buying. This has been driving the momentum. If these traders start to question value then we could see a short-term retracement.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through $64.83 will signal a resumption of the uptrend.
A move through $62.98 will change the minor trend to down for the first time since mid-December. This move could lead to increased selling volume.
The long-term 50% level is $64.11. This price is controlling the longer-term direction of the market. A sustained move under it will indicate a downside bias is developing.
The short-term range is $62.98 to $64.83. Its 50% level or pivot is $63.91. This price is controlling the direction of the market today.
Daily Technical Forecast
Based on the early price action, the direction of the March WTI Crude Oil futures contract will be determined by trader reaction to the long-term 50% level at $64.11 and the short-term 50% level at $63.91.
Overtaking and sustaining a move over $64.11 will indicate the presence of buyers. This could trigger a retest of $64.83.
A sustained move under $63.91 will signal the presence of sellers. This could generate the downside momentum needed to challenge the minor bottom at $62.98.
The minor bottom at $62.98 is the trigger point for an acceleration to the downside with the next target a major uptrending Gann angle at $61.32 today.
If the crude oil market stays inside its current range then we could see an eventual break into its 50% level at $60.45.
This article was originally posted on FX Empire
