WTI crude oil is taking a breather from its weekly losses by hanging out at a key technical support zone.
Is the Black Crack ready for a bullish swing?
We’re taking a closer look at USOIL’s 4-hour time frame:
WTI Crude Oil (USOIL) 4-hour Chart by TradingView
In case you missed it, U.S. crude oil prices have been taking hits thanks to demand concerns from China – the world’s second-largest economy – and easing geopolitical tensions in the Middle East.
But that was earlier this week. American Petroleum Institute (API) just printed a surprise U.S. inventory draw while Israel is renewing its air strike efforts in southern Lebanon and in Beirut.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on crude oil and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
USOIL, which revisited its weekly lows near $69.80, has turned higher and looks comfortable just above the key $70.00 psychological handle.
As you can see, the $70 mark is also around the 4-hour chart’s 200 SMA and is not far from an ascending channel support that’s been around since early September.
Are we looking at the start of a bullish swing?
Look out for bullish candlesticks above $70.00, which could set up USOIL for a potential bounce to the $73.00 mid-channel area if not the $75.15 Pivot Point and previous resistance zone.
If USOIL extends its downswing and makes new weekly lows, however, then a move to the $69.50 channel support levels may be on the table.
Consistent trading below the $70.00 psychological handle could draw in enough bears to drag U.S. crude oil prices to $69.00 if not the $67.50 previous lows.
Good luck and good trading this one!