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Crude Oil Price Update – $52.14 Key Pivot Before API Report

U.S. West Texas Intermediate crude oil futures are trading higher late in the session. Increased demand for risky assets is helping to support the market on Tuesday. Buyers are reacting to reports suggesting that China is moving closer to providing more stimulus for its ailing economy. Traders are saying that this lifted expectations for stronger demand.

Late in the session, investors will get the opportunity to react to the latest weekly storage data report from the American Petroleum Institute. It is expected to show a drawdown of about 250,000.

At 1919 GMT, March WTI crude oil is trading $52.33, up $1.53 or +3.07%.

Daily March WTI Crude Oil
Daily March WTI Crude Oil

Daily Technical Analysis

The main trend is down according to the daily swing chart. Momentum was trending higher, however, until the closing price reversal top on January 11. A trade through $53.61 will negate the closing price reversal top and change the main trend to up. A trade through $50.66 will signal a resumption of the downtrend.

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The minor trend is up. $53.61 is the new minor top. $50.66 is the new minor bottom. A trade through this bottom will change the minor trend to down and will reaffirm the shift in momentum to down.

The short-term range is $53.61 to $50.66. Its 50% level or pivot at $52.14 is controlling the price action this week.

The main range is $42.67 to $53.61. If there is renewed selling pressure then its retracement zone at $48.44 to $46.85 will become the primary downside target.

Daily Technical Forecast

Based on the current price at $52.33, the direction into the close is likely to be determined by the pivot at $52.14.

Bullish Scenario

A sustained move over $52.14 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the first downtrending Gann angle at $53.23.

Overtaking $53.23 will indicate the buying is getting stronger with $53.61 the next target. Look for an acceleration to the upside on a trade through $53.61 with the next target angle coming in at $54.11. This is the last potential resistance angle before the $54.98 main top.

Bearish Scenario

A sustained move under $52.14 will signal the presence of sellers. This could trigger a break into the downtrending Gann angle at $51.48. If this angle fails then look for the selling to extend into the minor bottom at $50.66.

Taking out $50.66 will change the minor trend to down. This could trigger a break into the long-term uptrending Gann angle at $49.67. This angle is a potential trigger point for an acceleration to the downside with $48.14 the next major target.

This article was originally posted on FX Empire

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