Crude Oil Price Forecast: Surpasses Key Resistance, Eyes Further Gains

Bruce Powers
Published: Jun 18, 2024, 20:48 GMT+00:00

Crude oil's bullish breakout above the 200-Day and 50-Day MAs indicates strong demand and potential for further upside, with resistance at 82.1.

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Crude oil confirmed a bull breakout above both the 200-Day and 50-Day MAs today as it exceeded Monday’s high of 80.43. It also broke above the most recent swing high of 81.00 thereby surpassing a significant price level. A daily close above that price level will further cement the bullish implications of today’s advance. At the time of this writing crude oil has reached a high of 81.26 but continues to trade near the highs of the day.

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Price Extended?

Arguably, the price of crude is getting extended and due for a pullback. It was up by 11.7% at today’s high, from the most recent swing low of 72.73. However, demand looks to be staying strong even after busting through potential resistance at the two moving average lines and busting above a trendline. It has been rising with enthusiasm and today’s bullish price action says there may be more upside to go before a retracement of note.

Pullback Support Areas

Prior resistance now becomes possible supports areas during a retracement. The obvious levels are now the 50-Day MA at 80.11, the 200-Day MA at 79.77, followed by 79.25, which was a peak in January and is marked on the chart. Reaching the 61.8% Fibonacci retracement at 82.1 looks to be next on the agenda for crude. It combines with the area around the intersection of two trendlines, one rising and one falling.

Given the confluence of indicators marking the 82.1 price area, it would not be surprising to see crude rise next into the possible resistance zone. Between the two lines the long-term downtrend line has greater importance as it covers a longer period.

Daily Close Above Downtrend Line Projects Higher

A daily close above the downtrend line will provide the next more significant sign of strength for crude. The first breakout attempts in April failed. This second attempt may have a greater chance of success. It would greatly increase the chance to challenge the 87.90 April swing high. A rise above there would trigger a bull trend continuation signal for the trend begun from the December swing low. The weekly chart confirms the strength seen in the daily chart as there is a series of higher weekly highs and higher lows starting.

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About the Author

Bruce boasts over 20 years in financial markets, holding senior roles such as Head of Trading Strategy at Relentless 13 Capital and Corporate Advisor at Chronos Futures. A CMT® charter holder and MBA in Finance, he's a renowned analyst and media figure, appearing on 150+ TV business shows.

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