Oil Price Fundamental Daily Forecast – Steady-to-Better on Weaker Dollar as Fed Rate Hike Fears Ease

U.S. West Texas Intermediate crude oil prices are edging higher at the mid-session on Friday after clawing back earlier losses. Fueling the rebound in prices was a weaker U.S. Dollar and mixed jobs report. Nonetheless, the market remains in a position to end the first week of the year lower due to global recession concerns.

At 17:44 GMT, March WTI crude oil futures are trading $74.96, up $1.04 or +1.41%. The United States Oil Fund ETF (USO) is at $64.83, up $0.05 or +0.08%.

The U.S. Dollar is retreating on Friday after U.S. Treasury yields fell to a two-week low. A weaker greenback tends to drive up demand for dollar-denominated assets like crude oil. The drop in yields and the U.S. Dollar is being fueled by a mixed U.S. Non-Farm Payrolls report and a contraction in U.S. services industry activity for the first time in more than 2-1/2 years.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $72.74 will signal a resumption of the downtrend. A move through $81.62 will change the main trend to up.

The short-term range is $70.56 to $81.62. The market is currently testing its retracement zone at $74.78 to $76.09.

The minor range is $81.62 to $72.74. It pivot at $77.18 is potential resistance. The main range is $89.89 to $70.56. Its retracement zone at $80.23 – $82.51 is the key resistance. It stopped a rally at $81.62 earlier in the week.

On the downside, the major support is a long-term retracement area at $70.21 to $62.12.

Daily Swing Chart Technical Forecast

Trader reaction to the short-term Fibonacci level at $74.78 is likely to determine the direction of the March WTI crude oil futures contract into the close on Friday.

Bullish Scenario

A sustained move over $74.78 will indicate the presence of buyers. This could lead to a labored rally with potential targets $76.09 and $77.18.

Bearish Scenario

A sustained move under $74.78 will signal the presence of sellers. This could lead to a retest of the minor bottom at $72.74. If this fails then look for the selling to possibly extend into the support cluster at $70.56 – $70.21.