October crude oil followed through to the downside on Thursday, September 1, as traders pounded the market in a continued reaction to the bearish EIA numbers from the day before.
The buildup of inventories is reigniting concerns that a rebalancing of the supply glut is further down the pike. Crude oil broke down below the 50% retracement level (44.27) and made its way to the 61.8% retracement level (43.07), making its low at 43.00.
Crude found support and rallied to 43.55 and ended the day just below at 43.53. The retracement levels are from the August 3 low of 39.19 to the August 19 high of 49.36. If crude oil can sustain a rally above 43.74, a retest of the 50% retracement and then resistance 44.42 is possible.
If crude oil can trade below the 61.8% retracement level, a test of support at 42.10 is possible. Trendline support is at 41.68. We get the employment situation report on Friday morning and this could create volatility in crude oil as traders react to the possibility of a rate hike and any reaction in the US dollar.
High 45.08
Low 43.00
Last 43.53
Daily Pivot Points for 9/2/16
R2 45.95
R1 44.74
PIVOT 43.87
S1 42.66
S2 41.79