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Crude Oil Price Forecast: Breakouts Await, Crude Oil Coil Continues

Crude Oil Price Forecast: Breakouts Await, Crude Oil Coil Continues

2019-05-11 04:00:00
James Stanley, Currency Strategist
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Crude Oil Price Forecast: Breakouts Await, Crude Oil Coil Continues

Crude Oil Price Forecast Talking Points:

Technical Forecast for USOil: Neutral

Crude Oil Price Recovers From Bearish Gap to Start the Week

In a week that started off with a gap-down, Crude Oil prices have continued to grasp for support. Prices pushed-lower at the start of the week following a couple of tweets from President Trump on Sunday. This created a quick move of weakness in WTI that saw prices push down to 60.06 on Monday, with buyers showing up just ahead of a test of the psychological level at 60.00. This was the third zone of support identified in the technical forecast from a few weeks ago; and after this came into play, buyers showed up to support the bid.

Crude Oil Price Four-Hour Chart

Oil

Chart prepared by James Stanley

That bullish response brought another quick move, this one-higher as bulls bid Crude up for a re-test of the Fibonacci level at 62.84. But, again, this proved a major inflection point for this week as sellers showed up to temper the move. Since then – it’s been a progression of both higher-lows and lower-highs as near-term price action in Crude Oil has narrowed.

Crude Oil Price Two-Hour Chart

Oil

Chart prepared by James Stanley

Crude Oil Strategy Moving Forward

At this point, there may be aim for continuation of the longer-term bullish trend in Crude Oil prices. From the Daily chart, traders can observe an element of support playing in this week from the 23.6% Fibonacci retracement of the December 2018 low up to the April high; and this could keep the door open for bullish strategies. The complication, at this point, would be shorter-term in timing the move, and given the symmetrical wedge that showed up this week, there could be a deeper pullback before that longer-term up-trend is ready to continue. The price around 57.50 is especially interesting, as there’s an element of confluent in this area. The 38.2% retracement of the same moved mentioned above runs just a few cents short of the 38.2% retracement of the 2016-2018 major move. This was also a zone that exhibited firm resistance in February, opening the door for a scenario of support showing around prior resistance.

The technical forecast for next week will be set to neutral. While the longer-term trend remains attractive for bullish biases, the indecision exhibited this week muddies the backdrop, and timing remains of concern.

Crude Oil Price Daily Chart

Oil

Chart prepared by James Stanley

To read more:

Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts have a section for each major currency, and we also offer a plethora of resources on Gold or USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.

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--- Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX

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