Bounce off the midpoint on the first look
The price of crude oil futures has moved lower in trading today. It is currently trading at $48.32 down -$1.35 or 2.76%. The low extended to $47.73. The high reached $49.71 (nearly a $2.00 trading range). Libya crude output picked up and US production is climbing.
Technically, the price decline tested the 50% retracement of the move up from the May 5th low at $43.76. That level comes in at $47.88. The low for the day reached $47.73 before quickly bouncing. The failure to extend on the break, increases that levels importance as support going forward.
Is a bottom in place?
For the buyers near the midpoint they are hoping that support level hold and there is a rebound back toward the 100 hour MA at $49.52 area (blue line in the chart above). An interim level to get back above would be the broken 38.2% at $48.85. The momentum to the downside increased on the break of that level earlier today. The 100 hour MA has acted as a ceiling area in trading this week. Expect some cause for pause on a test.
The API inventory data will be released at the end of the trading day today. Tomorrow the EIA will release there most recent look at inventory levels. Both have the potential to move the market.
