Crude Oil Prices Challenge Key Range Top. Breakout Ahead?
CRUDE OIL TECHNICAL OUTLOOK: NEUTRAL
- Crude oil prices locked in choppy range after early-2022 Ukraine war spike
- Breaching range top resistance may expose the yearly high above $130/bbl
- Near-term support just above $101/bbl, downside extension may be difficult
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Crude oil prices have been locked in a choppy consolidation range for much of the year. The WTI contract spiked to test above the $130/bbl figure amid supply disruption fears as Russia invaded Ukraine, and then pulled back to settle for aimless oscillation in a wide $92.93-116.64 trading band.
Prices have now edged upward to challenge range resistance. A break above that secured on a daily closing basis may set the stage for extension higher, toward the year’s high at $130.50. The record high just above $147/bbl set in mid-2008 is not far behind that if the 2022 swing top is cleared.
WTI crude oil (daily chart)
Chart crated with TradingView
The bounds of the near-term upswing within the range from mid-April lows seem to rest just above the $101/bbl mark. A downturn from here that takes prices through this that figure is likely to neutralize immediate upward pressure and set the stage for a test of the range floor.
From there, confirmation of a breach – again, on a daily close – may open the door for a slide below the $90/bbl handle to revisit resistance-turned-support at $84.65. The dense congestion zone between where prices currently sit and these levels warns that progress in this direction may be slow and struggling for lasting follow-through.
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--- Written by Ilya Spivak, Head Strategist, APAC for DailyFX
To contact Ilya, use the comments section below or @IlyaSpivak on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.