Crude Oil Price Forecast: Rebounds Sharply, Eyes $71.84 Target Zone

Crude oil triggered a bullish reversal on Tuesday as it rallied above the five-week lower swing high of $69.98. That signaled the potential continuation of a rising ABCD pattern. And it follows a successful test of support around the 50-Day MA over a couple week period. This is bullish behavior that points to likely higher prices. A daily close above the $69.98 swing high will confirm that breakout.

Strength of the rally was also indicated by a decisive breakout above the 200-Day earlier today, and an upside launch from support of the 20-Day MA as well. The 20-Day line has turned up for the first time since early July, showing an improving trend.

Short-term Target Reached

Nonetheless, today’s high of $70.60 was a successful test of resistance around a prior support trendline and it completed the initial target for a rising ABCD pattern. Given the wide trading range for today, a pullback to test support around the 200-Day MA, now at $68.43, would be possible. It can be watched along with a minor swing high of $68.77 for possible support.

Notice that crude oil could continue to rise towards the next higher target zone of $71.73, yet remain below the rising trendline, which is also a lower channel line. That target zone is the confluence of a 50% retracement level and a 127.2% projected ABCD target at $71.84.

Higher Resistance Zone

Since the rally reached a five-week high, there is the potential for higher targets to eventually be approached. The 20-Week MA (not shown) is also providing bullish evidence for further strength. It was essentially a match of trend support that is represented by the 50-Day MA on the daily chart. If crude can retain strength into Friday, it might have its highest weekly closing price in six weeks.

Buyers Return

Nonetheless, it looks like a continuation of strength would be in reaction to the sharp rapid decline from the $78.44 swing high hit five weeks ago. It seems like if correct, a sharp rally into the next higher target zone might be possible. Bullish momentum clearly improved today, and the day’s low was a successful test of support at the 20-Day MA.

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