After falling by 12.62% since January 20, it would seem that the fall in WTI crude oil price has come to an end… for now. WTI crude oil CFDs traded within a 41-cent range in yesterday’s trading. By the end of the New York session, oil had settled at 108.87, 6 cents lower than where it opened for the day.
Crude oil price has been heavily-hit by the coronavirus outbreak. This is because it is anticipated that the disease would dampen demand for the commodity. While the recent numbers show that there are close to 5,000 people infected by the coronavirus, there were no significant updates yesterday. Perhaps market investors already anticipated that the number of confirmed cases would continuously rise f. Consequently, the lack of updates helped crude oil price hold on to support in yesterday’s trading.
Today, market sentiment will likely dictate the direction of crude oil price. With that said, make sure you keep tabs on our site as we provide updates on the coronavirus which has been the biggest market-mover for the past couple of weeks.
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On the hourly time frame, we can see that WTI crude oil price made lower highs and higher lows in yesterday’s trading. This follows after a drastic drop from Friday which effectively formed a bearish pennant chart pattern. WTI crude oil CFDs now look like the opposite of how gold price. In forex trading, this chart pattern suggests that there is more downside movement ahead of oil. A break below yesterday’s low at $52.09 could trigger a sell-off to $50.75 where crude oil price bottomed in June and August 2019.
However, a close above yesterday’s highs at $53.50 could mean that the commodity may retrace some of its losses. Drawing the Fibonacci retracement tool from the high of January 21 to yesterday’s low, we can see that crude oil price may find resistance at the 61.8% Fib level. This price, $56.18, also seems to coincide with the falling trend line (from connecting the highs of January 6, January 8, January 20, and January 21).