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Crude Oil Finds some Support near $39

crude, oil

Looking at the benchmark West Texas Intermediate (WTI) crude oil futures contract on the above daily MT 4 chart, the black gold was trading $39.50 per barrel during the early Asian trade session before bouncing higher to $40.50 per barrel. The WTI contract did hit a session low price point at $39.12 per barrel.

Price action remains biased to the downside as the WTI crude oil contract is still below the fifty (50) day simple moving average (SMA)

The economic calendar, for Friday, is not very busy as we end the week. The European Union is publishing monthly M3 money supply data. The Eurozone will also publish their monthly private loans data (annualized basis).

 The United States will release key monthly core and headline durable goods orders. This is likely to be the headline event today. The United Kingdom is also not publishing volatile economic data on Friday. The UK will release their monthly public sector borrowing data set during the European trade session. Canada has no macroeconomic data scheduled to be released as the week comes to an end.

Crude oil prices are still under pressure as global supply remains high and demand remains low thanks to a resurgence on coronavirus (Covid-19) cases around the world. Countries in the European Union, like France, Spain and Germany are considering mobility restrictions as is the United Kingdom to try to stem this second wave that could derail a fragile economic recovery and has hurt he demand for crude oil and its derivatives like gasoline and jet fuel.

Daily WTI Crude Oil Technical Analysis

Looking at the above daily MT 4 chart, the WTI contract is has found some demand around $39.90 per barrel and retraced some losses. With that said, if this spot WTI contract cannot stay above the key support level at $39 per barrel, further losses could be seen.

If this contract sees a daily close above the lower high in play at $41.72 per barrel then the bulls could enter this market driving prices higher.

A daily close below $39 per barrel will open the door to challenge the 8 September low price point that lines up at $36.13 per barrel.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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