Crude oil futures settled at $70.09, and back above a key retracement target

The price of WTI crude oil is settling at $70.09. The low for the day reached $68.68. The high for the day extended up to $70.66.

Technically, the price low today stalled right near its 200-hour moving average. That moving average is currently at $68.62. The subsequent move to the upside also moved back above its 38.2% retracement of the move down from the August 26 high of $77.56. That retracement level comes in at $69.94.

So holding the 200-hour moving average gave the buyers go-ahead to push higher, and although the price of crude oil traded above and below the 38.2% retracement, the settlement above it gives the buyers some hope that the buyers are trying to make a play.

On further upside, traders will look toward the high price from September 5th at $70.78. Above that and the 50% midpoint of the same move down from the August 26 high comes in at $71.40. That level also happens to correspond roughly with the high price from September 4.

Fundamentally, oil prices rose as the effects of Hurricane Francine kept nearly a fifth of crude oil production in the Gulf of Mexico offline. Also, as Adam pointed out in his earlier post (read it by CLICKING HERE), the positioning data released late on Friday shows extremely negative positioning in oil. When the open positions get out of line (in this case the shorts are high), it can lead to a squeeze higher, and that seems to have contributed to the gains.

This article was written by Greg Michalowski at www.forexlive.com.