WTI Crude Oil Price Analysis for January 11, 2019

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WTI crude oil continues to trend higher as it bounces gradually off the bottom of the ascending channel on the 1-hour chart. Price is closing in on the first target at the 38.2% extension near the mid-channel area of interest.

Stronger bullish pressure could take it up to the 50% extension past the swing high or the 61.8% extension at the channel top around $54 per barrel. The 78.6% extension is at $54.61 per barrel and the full extension is at $55.51 per barrel.

The 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, the uptrend is more likely to gain traction than to reverse. The gap between the moving averages is also widening to reflect stronger bullish momentum and the 100 SMA lines up with the channel bottom to add to its strength as support.

RSI is moving up but nearing the overbought zone to signal that there is some bullish pressure left but that buyers could be exhausted soon. Stochastic is also treading higher to indicate the presence of bullish momentum, but the oscillator is also approaching the overbought zone to signal exhaustion. Both oscillators turning lower could confirm the return in selling momentum and a possible break below the channel bottom.

However, the FOMC minutes may have propped risk appetite back up somewhat as committee members seemed to agree to slow down their pace of tightening for the year. The prospect of borrowing costs staying mostly unchanged could prove positive for businesses and energy demand, which might be enough to prop crude oil higher.

Also, the mid-level trade talks between the US and China could also prove positive for global trade if the nations signal progress in extending their ceasefire or even withdrawing earlier measures.

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