In today’s oil price forecast, I decided to share with you my insights from today’s Oil Trading Alert. Have a nice read!
February 12, 2025
Something bullish, something bearish and levels to watch.
Technical Picture of Crude Oil
Looking at the daily chart, we see that although crude oil futures finished yesterday's session above the upper border of the red pro-declining gap ($72.35-$73.16) from Feb. 4, the buyers failed to break above the 38.2% Fibonacci retracement based on the entire mid-Jan. – early Feb downward move (at around $73.76).
As you see, the proximity to this important resistance level lured the sellers to the trading floor, triggering a pullback and daily closure under the previously broken the 61.8% Fibonacci retracement marked with orange on the 4-hour chart below.
In this way, the futures invalidated the earlier breakout, suggesting that the bulls might not be as strong as they seemed at first glance.
This price action translated into a lower Wednesday’s open (Asian trading hours), creating another red pro-bearish gap ($73.17-$73.32) on the daily chart.
The combination of all these negative technical developments together with the sell signals generated by the 4-hour indicators accelerated further decline, which suggests that if the bulls do not manage to protect the 38.2% Fibonacci retracement (marked with blue), the way to lower prices will be open.
How low could the futures go?
If the bulls fail around $72.42 (the above-mentioned 38.2% Fibonacci retracement based on the recent entire upward move), we’ll see a test of the green supportive gap ($72.32-$72.49) created at the beginning of yesterday’s Asian session.
If it withstands the selling pressure, and crude oil futures finish the day above this nearest support, the buyers will likely turn towards the north.
However, considering all the above-mentioned technical factors, it seems that the pro-bearish scenario seems more likely at the moment of writing these words.
What do I mean by that?
If the bears manage to close the mentioned green gap, we’ll see further deterioration and test the 50% Fibonacci retracement (marked with blue) at around $72.
If the buyers fail here once again, the way to the previously broken Feb.6 intraday peaks and the 61.8% Fibonacci retracement (around $71.65-$71.80) will be open.
Therefore, in my opinion, keeping an eye on these supports could be the key to further profitable trades.
Summing up, although oil bulls closed the red gap from the beginning of the month, they didn’t manage to break above the 38.2% Fibonacci retracement and showed weakness, which encouraged their opponents to act and resulted in an invalidation of the earlier breakout. This price action translated into another pro-bearish price gap, which triggered further deterioration in the following hours, suggesting that a lower price should not surprise us in the coming day(s).
Have a profitable day, and see you tomorrow.
Anna Radomska