In today’s oil price forecast, I decided to share with you my insights from today’s Oil Trading Alert. Have a nice read!
Important breakout, the rising channel and levels to watch.
Technical Picture of Crude Oil
In Thursday’s alert, you could read the following:
(…) if the bulls manage to break above the Nov.7 intraday peaks, we’ll likely see a test of the upper border of the green rising channel (currently at around $73.30), which is the last stop before the second resistance zone marked on the daily chart, in the coming day(s).
From today’s point of view, we see that the situation developed in tune with yesterday’s assumptions, and oil bulls pushed the price higher, reaching the mentioned upside target.
Thanks to this price action, crude oil futures broke above the upper border of the green channel and tested the 61.8% Fibonacci retracement. As you see, these resistances lured the sellers and triggered a pullback, which invalidated the earlier tiny breakout.
Despite this drop, oil bulls managed to stop their opponents around previously broken Nov.7 intraday peaks, which resulted in a rebound. Such price action looks like a verification of yesterday’s breakout, which increases the likelihood of another attempt to move higher and attack the upper border of the orange gap ($71.51-$73.83) from Oc.15, 2024 and the 61.8% Fibonacci retracement (the second resistance zone marked with the red ellipse with 2).
Nevertheless, taking into account the sell signals generated by the 4-hour indicators and the proximity to the above-mentioned important resistance zone, it seems that the reversal and correction of the recent increases may be just around the corner.
Therefore, in my opinion, keeping an eye on the bulls’ behavior in this area could give us valuable clues about the next very short-term move.
Why?
Because any sign of their weakness (for example if the bulls fail to close the orange gap) will be used by their opponents to push the price lower in the coming week.
Summing up, crude oil futures broke above the upper border of the green channel and tested the 61.8% Fibonacci retracement. Despite this improvement oil bulls didn’t manage to hold the price above the channel, which translated into a pullback and a verification of yesterday’s breakout above the Nv.7 peak. Such price action suggests that another test of the mentioned resistances is likely. Nevertheless, the sell signals generated by the 4-hour indicators and the proximity to the second resistance zone marked on the daily chart increase the likelihood of a bigger reversal and correction of the recent increases in the coming day(s).
Have a profitable day and a wonderful weekend!
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Anna Radomska