U.S. West Texas Intermediate crude oil futures fell more than 3% on Friday, headed for their biggest weekly decline since June as concern around a slow economic recovery from the COVID-19 pandemic added to worries about weak oil demand.
Prices were also pressured by extended declines in the U.S. equities market and by a report showing U.S. job growth slowed further in August as financial assistance from the government ran out.
On Friday, October WTI crude oil settled at $39.77, down $1.51 or -3.66%.
On Monday, the U.S. market will be closed because of the Labor Day holiday. However, there will be limited trading on the electronic screen.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $39.00 will reaffirm the downtrend. The main trend will change to up on a move through $43.78.
On the upside, the major resistance is the long-term 50% level at $42.01.
The short-term range is $32.66 to $43.78. Its retracement zone at $38.22 to $36.91 is the next downside target. Aggressive counter-trend buyers could come in on the first test of this zone.
The main range is $23.26 to $43.78. Its retracement zone at $33.52 to $31.10 is the best downside target and value area.
Short-Term Forecast
The selling is being driven by weak demand. It will be hard to generate demand unless the major producers cut production, the U.S. government finally passes another stimulus package and a coronavirus vaccine is developed, tested, approved and successful.
The weak close on Friday suggests there are still sellers in there so we’re looking for the selling pressure to extend through the bottoms at $39.00 and into the short-term retracement zone at $38.22 to $36.91.
We’ll probably see some counter-trend buyers emerge on a test of this zone, but since the main trend is down, we expect traders to sell rallies.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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Crude Oil Price Update – Looking for Selling to Extend into at least $38.22 – $36.91 Over Near-Term - Yahoo Finance
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