Crude Oil Price Update – No Major Top Formation, but Could Be Ripe for Near-Term Pullback

James Hyerczyk

Updated Tue, Sep 25, 2018, 11:02 PM

U.S. West Texas Intermediate Crude Oil futures are trading lower early Wednesday after the U.S. said it would ensure crude markets are well supplied. President Trump also reiterated calls on OPEC to pump more oil and stop raising prices. Also weighing on prices was an industry report showing U.S. crude stocks unexpectedly climbed last week.

At 0446 GMT, November Crude Oil is trading $72.14, down $0.14 or -0.19%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $72.78 will signal a resumption of the uptrend. The main trend changes to down on a trade through $67.79.

The price action suggests we could go through a few days of normal profit-taking. There was no closing price reversal top on Tuesday so the selling wasn’t that great.

The minor trend is also up. A trade through $69.98 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is $69.98 to $72.78. Its 50% level or pivot at $71.38 is the first downside target. This is followed by the long-term Fibonacci level at $70.86.

The main range is $67.79 to $72.78. Its retracement zone at $70.29 to $69.70 is the primary downside target.

Since the main trend is up, buyers could show up at any of these levels. If they’re looking for value then look for a test of $70.29 to $69.70 to offer the best buying opportunity.

Daily Swing Chart Technical Forecast

If the early selling pressure continues then look for the move to extend into the short-term pivot at $71.38. Look for a technical bounce on the first test of this level.

A failure at $71.38 will indicate the selling is getting stronger. This could lead to a test of the major Fibonacci level at $70.86. This level is very important to the longer-term structure of the market. If it holds then this will indicate buyers are coming in to defend the longer-term trend.

If $70.86 fails as support then look for the selling to extend into the main retracement zone at $70.29 to $69.70. This is a value zone so I expect to see buyers show up on a test of this zone.

This article was originally posted on FX Empire