Crude Oil Price Forecast: Holds Wedge Breakout as 50-Day Test Looms

Crude Oil Holds Support After Wedge Breakout

Crude oil attempted a breakout from a bullish falling wedge earlier this week, reaching a high of $64.90 on Tuesday. Since then, it has pulled back, but Thursday’s low of $63.47 successfully tested support at the 8-Day moving average, keeping price action within Tuesday’s price range.

Triple Breakout Raises Prospects

Tuesday’s advance triggered a triple breakout: crude rose above the 20-Day moving average, cleared a small double bottom pattern, and closed above the downtrend line that marked the top of the wedge. Thursday’s close near the same trendline keeps the breakout attempt alive. A daily close at or above this line may set the stage for renewed upside momentum.

Still, crude remains in a broader downtrend. Immediate resistance sits just below the falling 50-Day moving average, now at $65.24, making it a key test for bulls.

Weekly Reversal Signal

On a broader timeframe, crude triggered a bullish weekly reversal by rising above last week’s high of $64.36. However, because the market has been consolidating for six weeks, the weight of this reversal is less convincing than it would be in a more clearly defined trend. Even so, confirmation with a weekly close above last week’s high would strengthen the bullish case.

Breakout Needs Follow-Through

A decisive move above this week’s high of $64.90 would signal a continuation of the counter-trend rally. Ideally, a falling wedge breakout is followed by a momentum spike, but that has yet to materialize. If bullish conviction is real, follow-through strength should emerge once prices clear and sustain above the 50-Day average.

Risks to the Pattern

The setup remains fragile. A decline below Tuesday’s low of $63.05 would undermine the breakout, signaling weakness instead of strength. While prices could technically remain above the wedge’s downtrend line while breaking that low, such price action would cast doubt on the breakout’s validity and raise the risk of further downside.

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