WTI crude oil is taking a break from its weekly losses by being in a key technical support area.
Is the black crack ready for an upward swing?
We take a closer look at the USOIL 4-hour time frame:
WTI (USOIL) 4 hours Chart by TradingView
In case you missed it, US crude oil prices have been taking a hit 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. The American Petroleum Institute (API) has just issued a surprise drawdown of US stockpiles as Israel renews its air efforts in southern Lebanon and Beirut.
Remember that directional biases and volatility conditions in market prices are usually driven by fundamentals. If you haven’t done your homework on Crude Oil and the US Dollar yet, it’s time to check the economic calendar and stay up to date with daily fundamental news!
USOIL, which has looked back at weekly lows near $69.80, has turned higher and looks comfortable above the key psychological handle $70.00.
As you can see, the $70 mark is also near the 200 SMA on the 4-hours chart which is not far from the support of a bullish channel that has been in place since early September.
Are we witnessing the beginning of an upward wave?
Look for bullish candles above $70.00, which could set USOIL up for a potential bounce back to the $73.00 middle channel area if not the $75.15 pivot point and previous resistance area.
If USOIL extends its decline and posts new weekly lows, a move to $69.50 channel support levels could be on the table.
Continued trading below the psychological level of $70.00 could attract enough bears to drag US crude oil prices to $69.00 if not to previous lows of $67.50.
Good luck and good trading this one!