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Crude Oil Price Update – Uptrend Safe for Now, but Ripe for a Short-Term Pullback

U.S. West Texas Intermediate crude oil futures are trading sharply lower as a stronger U.S. Dollar reduced foreign demand for the dollar-denominated commodity. Crude oil was also pressured by profit-taking as some bullish traders began reducing long positions ahead of the March 4 OPEC+ meeting.

At 21:47 GMT, April WTI crude oil futures are trading $61.50, down $2.03 or -3.20%.

The U.S. Dollar rose as U.S. government bond yields held near one-year highs, making dollar-priced oil more expensive for holders of other currencies. Next week, OPEC+ meets to discuss returning more supply to the market beginning in April.

Essentially, crude oil is trading higher than pre-pandemic levels, while demand continues to lag. Therefore, there has to be a correction because the market is ahead of the fundamentals.

Daily April WTI Crude Oil
Daily April WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $63.81 will signal a resumption of the uptrend. The main trend will change to down on a move through $57.31.

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The minor trend is also up. A trade through $58.60 will change the minor trend to down. This will also shift momentum to the downside.

The first minor range is $57.31 to $63.81. Its 50% level at $60.56 is the first downside target. Since the main trend is up, we could see a technical bounce on the first test of this level.

The second minor range is $51.53 to $63.81. Its retracement zone at $57.67 to $56.22 is a strong support area.

Short-Term Outlook

The selling pressure on Friday suggests sellers will take a run at $60.56 early next week. Watch for buyers on the first test of this level. They will attempt to retracement The Thursday to Friday decline.

If $60.56 fails then look for an acceleration to the downside with $58.60 the next potential downside target price.

The uptrend will resume on a trade through $63.81, but don’t look for an acceleration to the upside unless buyers can overcome the October 22, 2018 main top at $64.26 with conviction.

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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