U.S. West Texas Intermediate crude oil futures are edging lower on Monday with traders reacting to a pick-up in U.S. drilling activity and a refinery fire in Illinois that resulted in the shutdown of a large crude distillation unit. The weekly report from Baker Hughes showed energy firms last week increased the number of oil rigs operating for the second time in three weeks. Additionally, WTI prices were also weighed down by closure of a distillation unit that uses 120,000 barrels per day of crude oil.
At 03:55 GMT, March WTI crude oil is trading $52.09, down $0.63 or -1.19%.
Daily Technical Analysis
The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $51.33 will change the main trend to down. A move through $55.75 will signal a resumption of the uptrend.
The minor trend is down. This move changed momentum to the downside. A trade through $51.80 will reaffirm the downtrend.
The short-term range is $51.33 to $55.75. Its 50% level or pivot at $53.54 is resistance.
The main range is $42.67 to $55.75. If the main trend changes to down then its retracement zone at $49.21 to $47.67 will become the primary downside target.
Daily Technical Forecast
Based on the early price action, the direction of the March WTI crude oil futures contract the rest of the session will be determined by trader reaction to the uptrending Gann angle at $52.58.
A sustained move under $52.58 will indicate the presence of sellers. If this move creates enough downside momentum then look for sellers to make a move into $51.80. If this price fails then look for a test of the main bottom at $51.33.
Taking out $51.33 will change the main trend to down. This should trigger a break into the long-term uptrending Gann angle at $50.67. If this fails then look for an acceleration to the downside with the 50% level at $49.21 the next major downside target.
Overtaking and sustaining a rally over $52.58 will signal the presence of buyers. This could trigger a retracement into a cluster of levels at $53.54, $53.83 and $54.02.
The daily chart indicates the way of least resistance is to the downside.
Please let us know what you think in the comments below.
This article was originally posted on FX Empire
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