Remember that long-term support we were watching a few days ago? Well, U.S. crude just bounced right off it.
How high can the Black Crack fly before the sellers jump back in?
Let’s zoom in on the 4-hour chart and see what’s cooking.
WTI Crude Oil (USOIL) 4-hour Chart by TradingView
In case you missed it, crude prices caught a lift on Tuesday after word got out that the U.S. is snapping up a million barrels to top off its oil reserves.
That wasn’t the only tailwind, either. Hints from Washington about wrapping up the government shutdown, plus talk that the U.S. and China might finally iron out some trade wrinkles, helped keep the bulls in charge.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on WTI crude oil and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
WTI crude (USOIL) bounced cleanly off that $56.00 psychological level and is now holding above $58.00, setting up for a possible run toward higher inflection points.
We’re looking at the $59.00 area, which aligns with the R1 ($59.56) Pivot Point, 38.2% – 50% Fibonacci retracement of October’s downswing, and the trend line resistance that’s been around since late September.
If the bulls keep pushing, crude could also make a move toward the $62.00 area, which ties in with the R2 Pivot Point near $61.87, the 200 SMA, and an old support level from August and September.
But watch those candles closely. Bearish formations or a sharp turn lower from these resistance areas could hand short-term traders a solid opportunity to fade the move.
On the flip side, a clean break and hold above those resistance levels could open the door for a run toward $66.00 or even $67.00.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
