CRUDE OIL PRICE OUTLOOK: BULLISH TREND MIRED BY KEY RESISTANCE, STALLING MOMENTUM
Crude oil has edged barely decrease for 3 consecutive buying and selling classes because the $66.00-handle shapes up right into a key zone of technical resistance. This space is roughly underpinned by the April 2019 and January 2020 swing highs. Oil worth motion appears to have discovered a little bit of buoyancy round final month’s excessive, nonetheless, because the commodity goals to keep up altitude and its broader bullish development.
Oil costs thus present potential to proceed marching increased alongside the positively sloped 20-day easy transferring common. Surmounting the $66.25-price stage would possibly tee up crude oil for one more push to contemporary yearly highs. Though, if downward strain lingers and pushes crude oil under the $63.50-price stage, the commodity may embark on a deeper pullback.
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CRUDE OIL PRICE CHART: DAILY TIME FRAME (16 OCT 2020 TO 16 MAR 2021)
Chart by @RichDvorakFX created utilizing TradingView
This would possibly deliver into focus the 23.6% Fibonacci retracement stage of its newest bullish leg. The 50-day easy transferring common could function an extra layer of technical assist for crude oil. To that finish, upward momentum behind crude oil worth motion has proven indicators of slowing. Bearish divergence highlighted by the MACD indicator and relative power index speaks to this.
| Change in | Longs | Shorts | OI |
| Each day | 0% | -2% | -1% |
| Weekly | 5% | 9% | 7% |
Crude oil worth motion may additionally face headwinds from a attainable Bollinger Band squeeze. It’s because Bollinger Band width contraction reduces the statistical chance of upside potential. Nonetheless, basic occasion threat posed by the discharge of crude oil stock knowledge, along with up to date FOMC financial projections, would possibly dictate the near-term course of oil worth motion. Take a look at the DailyFX Financial Calendar for particulars on upcoming knowledge releases and scheduled occasion threat.
— Written by Wealthy Dvorak, Analyst for DailyFX.com
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