U.S. West Texas Intermediate crude oil is daycare open at 5amtrading lower on Wednesday, pressured by heightened volatility and weakness in the U.S. stock market. The catalyst behind the selling pressure is weaker-than-expected manufacturing data from China, which raised concerns over future demand. Oil traders are also worried about rising U.S. production that could offset any gains from the OPEC-led production cuts, which began on January 1.

At 1446 GMT,

February WTI crude oil

is trading $44.59, down $0.82 or -1.81%.

Daily February WTI Crude Oil

Daily Technical Analysis

The main trend is down according to the daily swing chart. The market is in no position to change the main trend to up. However, a trade through $42.36 will signal a resumption of the downtrend.

The short-term range is $42.36 to $47.00. Its 50% level or pivot comes in at $44.68.

The main range is $54.77 to $42.36. Its retracement zone at $48.57 to $50.03 is resistance.

Daily Technical Forecast

Based on the early price action, the direction of the February WTI crude oil market is likely to be determined by trader reaction to the short-term pivot at $44.68.

Bullish Scenario

A sustained move over $44.68 will indicate the presence of buyers. The first upside target is a downtrending Gann angle at $45.27. This angle has been guiding the market lower since the $54.77 top on December 4.

Overcoming and sustaining a move over the angle at $54.77 will indicate the buying is getting stronger. If this move generates enough upside momentum then look for the rally to possibly extend into the minor high at $47.00.

Bearish Scenario

A sustained move under $44.68 will signal the presence of sellers. This could trigger an acceleration to the downside with the next major target the main bottom at $42.36. This is followed by the January 20, 2016 main bottom at $41.48.

This

article

was originally posted on FX Empire

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