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 7, 2025
Gaps, indicators, technical formations… what can we infer from them?
Technical Picture of Crude Oil
Let’s kick off today’s analysis by revisiting the events described in the previous alert:
(…) yesterday’s rebound pushed the price back above the mentioned 61.8% Fibonacci retracement and the previously broken upper border of the red declining trend channel, forming a strong bullish candle.
Despite this move the futures didn’t manage to close the big red pro-declining gap ($72.37-$73.16), which started the day (marked on the daily chart).
The bears sensed an opportunity to strike back (…) they showed their claws and launched an attack on lower levels, slipping under $72.
What can we expect next?
Taking all the above into account and combining it with the sell signal generated by the 4-hour Stochastic Oscillator, it seems that further deterioration may be just around the corner.
If this is the case, we could see a re-test of the strength of the upper line of the red declining trend channel (currently at around $71). (…)
(…) if the buyers fail there, a re-test of yesterday’s low (and the 78.6% Fibonacci retracement marked with black) (…) should not surprise us.
From today’s perspective, it’s clear that things played out as I predicted earlier, with the bears showing up at the levels I pointed out during yesterday’s session.
Although crude oil futures slipped slightly below the 78.6% Fibonacci retracement, oil bulls made a comeback right after today’s open (Asian trading hours), not only invalidating yesterday’s breakdown under this important support, but also pushing the price back above $71 during the European trading hours.
At the same time, the 4-hour CCI and the Stochastic Oscillator generated buy signals, giving the bulls the green light to move and target higher levels in the upcoming hours.
So, what can we expect from today’s U.S. session?
Looking at the 4-hour chart, we can see that despite today’s bounce, the price is still below the first Fibonacci retracement and also still inside the orange declining wedge.
What does this mean for the futures? Is the worst truly behind the bulls?
In my opinion, their position in the game will strengthen only after they break above $71.64.
Why?
Because that would mean the breakout not only above the first Fibonacci retracement, but also a climb above the mentioned orange formation, which is currently keeping them in a technical bind.
What could happen if the buyers really manage to close ranks and successfully break above this first key resistance zone?
At that point, the path to yesterday’s intraday peaks (around $71.80) or maybe even to the 38.2% Fibonacci retracement (at around $72.22) would be wide open.
Before we wrap up the latest events, it’s also worth noting one very positive technical development: today’s session started with a small red gap ($70.47-$70.61), which was closed in the following hours, confirming the bulls’ determination and appetite for higher prices.
Summing up, oil bulls invalidated the earlier small breakdown under the 78.6% Fibonacci retracement and closed the red gap that started Friday, which in combination with the buy signals generated by the 4-hour indicators suggests that higher prices may be just around the corner – especially if the buyers manage to break above the upper line of the orange declining wedge later in the day. Stay tuned.
Have a profitable day, a wonderful weekend and see you on Monday!
Anna Radomska