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Crude Oil Price Outlook: Trying to Break Strong Resistance

Crude Oil Price Outlook: Trying to Break Strong Resistance

Paul Robinson, Strategist

Crude Oil Technical Highlights:

  • WTI crude oil at thicket of resistance
  • Risk sentiment remains supportive

WTI crude oil at thicket of resistance

WTI crude oil has been stuck trading in a range since running into a significant patch of resistance, but that could soon change with a little more strength. The big area of confluent resistance consists of the Saudi gap (which has been filled), the 2017 & 2018 lows, and the 200-day MA which lies directly ahead.

A breakout above the 200-day (43.70) will have oil out in the open to run further, with no highly visible technical barriers standing in its way. The most prominent area of lows (resistance) to watch doesn’t arrive until all the way up to around 51, where three lows were made last year from June to October.

Should, however, we see the near-term push higher fail with force, then the bias could swiftly shift lower as the rejection could constitute an exhaustion and change in trend at highly meaningful levels. For now, risk trends remain supportive of higher prices with the S&P 500 still pointed upward and nearing the record high.

Traders may opt for a momentum or pullback approach upon a confirmed breakout, but if prices become extended quickly then strategies that fall under the latter category may hold the best risk/reward opportunity.

WTI Crude Oil Daily Chart (trying to make a break for it)

WTI crude oil daily chart

WTI Oil Chart by TradingView

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---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.

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