Basing on Friday’s close at $54.04, the direction of the March WTI crude oil market during Monday’s holiday-shortened session would be determined by trader reaction to the former main top at $53.61.
The U.S West Texas Intermediate crude oil futures hit their highest level since December 7 at the end of the week on Friday, with the help of another strong performance in U.S equity markets.
The catalyst behind these gains was news regarding China’s proposed plan to eliminate its trade surplus with the United States at the first round of mid-level trade negotiations at the beginning of the year.
Having the main trend up according to the daily swing chart, which was thanks to buyers who took out the last swing top at $53.61. But trading should be handled with caution, as trading through $50.66 would change the main trend to down.
A move that could be sustained over $53.61 will indicate the presence of buyers, and it will also indicate Friday’s movement being fueled by real buying and not just buy stops.
If we keep with the upside momentum, the market will have the chance to test December’s 4 main top at $54.98 and then see a technical bounce on the first test of that level, but, it is also the trigger point for an acceleration to the upside, having the next major target coming in at $54.98.
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