Advertisement
Advertisement

Crude Oil Price Update – Trader Reaction to $89.77 Pivot Sets the Tone

By:
James Hyerczyk
Updated: Aug 19, 2022, 06:34 GMT+00:00

Worries about a global economic slowdown have put a lid on any major rallies, while forecasts calling for tighter supplies have been supportive.

WTI Crude Oil
In this article:

U.S. West Texas Intermediate crude oil futures are edging lower early Friday after failing to follow-through to the upside, following a price surge the previous session.

The market is trading lower for the week but off a six-month low as traders continue to defend a long-term support.

Nonetheless, worries about a global economic slowdown continue to put a lid on any major rallies, while the market is attracting some buyers on forecasts calling for tighter supplies later in the year.

At 06:13 GMT, October WTI crude oil futures are trading $89.46, down $0.65 or -0.72%. On Thursday, the United States Oil Fund ETF (USO) settled at $74.24, up $2.19 or +3.04%.

Daily October WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $85.37 will signal a resumption of the downtrend. A move through $94.17 will change the main trend to up.

The minor range is $94.17 to $85.37. The market is currently straddling its 50% level at $89.77.

On the downside, the major support is a long-term retracement zone at $88.26 to $81.85. This zone has stopped the selling three times over the past month including this week’s low at $85.37.

On the upside, the nearest resistance is the short-term retracement zone at $92.56 to $94.26.

Daily Swing Chart Technical Forecast

Trader reaction to the minor pivot at $89.77 is likely to determine the direction of the October WTI futures contract on Friday.

Bullish Scenario

A sustained move over $89.77 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the short-term retracement zone at $92.56 to $94.26. The latter is a potential trigger point for an acceleration into $99.75 to $100.75.

Bearish Scenario

A sustained move under $89.77 will signal the presence of sellers. The first downside target is the long-term 50% level at $88.26. If this price level fails then look for the selling to possibly extend into this week’s low at $85.37.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.

Advertisement