Crude Oil Price Forecast: Breakouts Await, Crude Oil Coil Continues
Crude Oil Price Forecast Talking Points:
- The early-portion of this week saw a quick move of weakness re-buffed around the 60-level, after which buyers posed a push up to the 62.84 Fibonacci level. Since then, price action has continued to coil into a tighter range. This highlights breakout potential in Oil prices going into next week; but there may be scope for a deeper retracement move before the longer-term bullish trend might be ready for continuation.
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
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
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
Chart prepared by James Stanley
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--- Written by James Stanley, Strategist for DailyFX.com
Contact and follow James on Twitter: @JStanleyFX
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