Crude Oil Price Forecast: Recovery Above 200-Day Signals Upside Potential

Rally Strengthens Following Moving Average Reclaim

Crude oil is poised to continue a rally that followed a second bottom at $55.82 in early January. The advance identified dynamic support at the 20-day average on Tuesday, after falling below the 200-day average. However, strength was quickly seen with a recovery of the 200-day line on the same day and a daily closing price above it. Both Wednesday and Thursday confirmed the strength indicated by the recovery of the 200-day average, as the daily ranges were both above that line.

Higher Swing Low and Fibonacci Support Reinforce Bullish Setup

Tuesday’s pullback established a higher swing low at $61.18 and completed a 61.8% Fibonacci of an internal upswing. The subsequent recovery puts crude oil on track to test the recent high of $66.57. That could lead to a continuation of the rally towards higher targets. If crude oil can sustain an advance above the 200-day average, it will have reached an important milestone since trading has occurred below the 200-day average since early August.

Upside Targets Defined by Trend Resistance and Measured Move

A sustained reclaim of the 200-day line suggests that the next upside targets may be reached, and possibly the more extreme price levels. A long-term downtrend line marks the upper level of trend resistance. Also, there is a measured move target calculated on a percentage basis around $77.40. That is where the current upswing matches the advance seen in the first rally from the bottom in 2025. It also identifies a key indicator, along with the 20-day average, to assess the strength or weakness of the short-term bull trend.

Near-Term Resistance Levels and Expansion Targets

Near-term resistance is at Wednesday’s lower high of $65.59, followed by the trend high at $66.57. The next target zone would then be from around $67.02 to $67.83, consisting of a 127.2% projected rising measured move target and the 78.6% Fibonacci retracement, respectively. Note that an internal downtrend line slices through the middle of that range, providing additional information. A decisive break above those two targets has crude oil targeting a 161.8% projected measured move at $69.29.

Weekly Inside Range Highlights Breakout Levels

On a weekly basis, crude oil is likely to complete the week within last week’s price range. That will establish an inside week, with a current high of $65.59. Therefore, an upside breakout of the inside week will be above that level, if it remains the highest price for the period.

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