Crude Oil Price Outlook May Soon Turn Bullish Again

Crude Oil Technical Highlights:

  • WTI crude oil is testing support not long after powerful weekly surge
  • Once a low is in could see oil rally to mid-95s in fairly short order

Recommended by Paul Robinson

Get Your Free Oil Forecast

December WTI crude oil futures surged by 16% the week before last, reminding the market how quickly oil can turn and burn. The pullback we are seeing is thus far orderly and smacks of a corrective sell-off and not a fading of the prior move.

The retracement has taken back about half the up-move from the September low, and with that it has brought into play support that held for much of the summer. The area immediately around 84.50 is a solid one.

The past couple of sessions we have seen December crude (CLZ) holding this level, but in the absence of a strong push off support the test has yet been confirmed. On the shorter-term time-frame there is a pattern developing that could change that.

Price action over the past few days is taking on a descending wedge which could trigger at any time. A clean hourly breakout above 85.53, followed by a daily close above that level should get things rolling higher.

The first level to watch as resistance is at 88.52, then the 200-day MA at 89.23. There is an unproven trend-line running lower off the highs that lies in the 90-area, but may not provide a problem. The next big swing level is high of the weekly surge at 92.42. The big level that I think could come into play on the next up-move is around 95.

If we see support fail here, then it will be important for oil to quickly find a low. The next level could come in around 80.49, but will be a rather deep retracement to come back from, and thus will take the shine off the current set-up.

Recommended by Paul Robinson

Futures for Beginners

Crude Oil (CL1!) Daily Chart

Crude Oil (CL1!) Hourly Chart

Chart, histogram  Description automatically generated

WTI Crude Oil Chart by TradingView

Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

—Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX

Source link

Leave a Reply

Your email address will not be published.