Crude Oil Price Forecast: Multiple Bullish Patterns Support Breakout Case

Crude oil continues to push up against a resistance zone around a prior long-term support level from May 2023. The price was $63.67 from a spike low. Notice the highs of each day this week were slightly above that price level, but the daily closing prices were below it. Moreover, the rally following a second low in early May also found resistance around the 2023 support level.

Consolidation Continues Above 50-Day MA

On Thursday, gold again consolidated within a relatively tight range around support of the 50-Day MA. That line was reclaimed on Monday and gold closed above the 50-Day line each day this week. That is a sign of strength, indicating the potential for an upside continuation. However, a signal is needed and that would be provided by a decisive rally above this week’s high of $64.22. Subsequently, a new bullish continuation signal would be generated on a rally above an initial swing high of $64.67 (B) from May 19.

Bull Breakout on Weekly

A bull breakout on the weekly chart triggered on Monday as last week’s high of $53.43 was exceeded. The breakout was confirmed on a daily basis and it will be confirmed on a weekly basis if Friday’s closing price is above that higher. That would be another bullish sign, and on the more significant longer time frame. A confirmed weekly breakout would put crude oil in a good position to challenge the May swing high.

Higher Potential Targets

The first rally from the April trend low found resistance at a high of $65.32. That was around a prior long-term support area. However, that price level should be exceeded if a breakout above the May swing high triggers, as bullish momentum has been building during consolidation. An initial key upside target is the confluence of two price levels. The 78.6% Fibonacci retracement is at $68.79 and a rising ABCD pattern points to $68.98.

There is also the potential for higher targets as there are two potential bullish patterns that could trigger. A potential double bottom reversal pattern would trigger on a rally above the April high of $65.32. Contained within the pattern is a more recent potential bull flag pattern. The flag would trigger on a rise above this week’s high.

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