Crude Oil Price Forecast: Breakout Signals Potential Upside Continuation

Crude Oil Breaks Above Key Fibonacci Resistance

Crude oil spiked to a 17-week high of $66.57 on Thursday, confirming strength of the counter-trend advance. Several potential resistance areas were surpassed, including a 61.8% Fibonacci retracement at $65.10 and a 100% rising ABCD target at $65.23. Signs of short-term exhaustion were seen after the day’s high as trading continues in the upper third of the day’s range. This suggests that further signs of trend exhaustion and resistance may be seen as recent gains are digested.

Price Action Signals Short-Term Exhaustion Risk

A rise above the 200-day average indicates that the rally may have further upside to go, either near-term with a break above today’s high, or following a correction of some degree. During pullbacks, the 200-day average needs to continue to show as support if crude oil is to have the chance of another leg higher. The first pullback following a breakout as resistance should confirm the average as support to further validate the signal. So, there is a great chance support is seen at or above the 200-day line.

200-Day Average Reclaimed as Bullish Support

It is important to recognize the magnitude of the previous price spike from the 2025 bottom at $55.81. Note the acceleration in bullish momentum that occurred once price broke away from the bottom. This suggests that investors should be open to the possibility of another sharp spike in the price of crude. A move with similar magnitude would put the current advance up near $77.30. Regardless of whether that target is reached, a breakout of a long-term downtrend line will trigger if the 78.6% Fibonacci retracement is hit at $67.83 and that will open the possibility of reaching the higher downtrend line.

Prior Rally Suggests Potential for Another Strong Advance

Given the scenario of seeing a rally similar in magnitude to the 2025 advance, pullbacks should be watched closely for support following by strength. But given strength seen in the advance of 2025, the rise in the price of crude could continue without much correction. Nonetheless, if the 200-day line is broken, the 10-day average becomes potential support as it marks the lower end of the short-term uptrend.

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