Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View More
Crude Oil Price Primed for Explosive Move

Crude Oil Price Primed for Explosive Move

Paul Robinson, Strategist

Crude Oil Technical Highlights:

  • WTI crude oil continues to coil towards what will likely amount to an explosive move
  • Longer-term points to higher levels but need a bit more confirmation
  • Can’t rule out a downside break, so need to wait

Oil Forecast
Oil Forecast
Recommended by Paul Robinson
Get Your Free Oil Forecast
Get My Guide

December WTI crude oil futures continue to coil up, with the swings becoming increasingly smaller since the end of August. This signals that while oil has been broadly directionless that is about to change. To start October oil posted a monster week to the upside, since then it has been digesting.

This price action coupled with the longer-term trend uptrend suggests the wedge that is building is more likely than not to resolve to the upside. However, even though probability appears skewed to the top-side confirmation is needed.

The 200-day moving average is proving to be problematic at this time and in conjunction with breakout territory. A firm crossing of the 200 and top-side trend-line should get things rolling for oil, with the current front month contract (December) having resistance around 92.42, then more significant resistance in the vicinity of 95.

The size of the wedge and general trend higher point to a sizable move, and if indeed it is up then a breakout could kick off a move back to the June highs. This would almost certainly take some time to achieve, but the trend structure and price action is there to support the notion that we will see those levels again relatively soon.

On the flip-side, a breakdown could develop as the wedge doesn’t itself signal direction but rather that a move is coming. In the event we see oil roll over and take out 85.30 with conviction then the next level to watch is the trend-line from 2020. This trend-line is meaningful now that we had a strong test and hold at the end of September. If that breaks, then the low at 75.70 and worse is at risk.

Futures for Beginners
Futures for Beginners
Recommended by Paul Robinson
Futures for Beginners
Get My Guide

Crude Oil (CL1!) Daily Chart

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

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES