Closing in on cluster of resistance in the $79.00s – Crypto News – Crypto News
Connect with us
Brent Oil forecasts revised lower to $100 by Q3 and $97 by Q4 – ING Brent Oil forecasts revised lower to $100 by Q3 and $97 by Q4 – ING

others

Closing in on cluster of resistance in the $79.00s – Crypto News

Published

11 months ago

on

  • Oil is rising up to a cluster of daily major moving averages in the $79.00s. 
  • These will probably present a tough level of resistance for the commodity. 
  • The persistence of the short-term uptrend will depend on a decisive break of this resistance barrier. 

WTI Oil is trading in the $78.50s during the US session on Friday. 

On the 4-hour chart used to assess the short-term trend Oil has decisively broken out a falling channel and reached the conservative target for the breakout at $78.17 (Fibonacci 0.618 extension of the width of the channel extrapolated higher).  

Oil 4-Hour Chart 

Since breaking out of the channel, Oil is probably now in a short-term uptrend with the odds favoring more upside in the short-term, given “the trend is your friend”. However, it has now reached its initial target so is vulnerable to a pullback. 

A breakout above the last lower high of the prior downtrend at $80.36 (May 29 high) would provide added bullish confirmation and extend the uptrend higher. Such a move might be expected to reach the next key target at $83.50 (April 29 high and top of chart gap). 

The direction of Oil is less clear on the daily chart used to assess the intermediate term trend. 

Oil Daily Chart

The key feature on the daily chart is the cluster of resistance in the $79s from all three major Simple Moving Averages (SMA) – the 50, 100 and 200-day SMAs. This is likely to present a considerable barrier to more upside and could be an inflection point for Oil price. 

It would require a close on a daily basis above $80.36 (May 29 high) to confirm a successful break above resistance from the three SMAs and a continuation up to a target at $83.50. 

WTI Oil appears to be trading within a broad long-term range between $64.00 and $93.00 on the weekly chart. This suggests the long-term trend is probably sideways. 

Oil Weekly Chart

Last week’s red club-shaped candlestick could be a sign the move down has completed and Oil price may be reversing. Similarly-shaped candlesticks often punctuate the end of down moves in asset prices. It is possible Oil price could be about to begin a bullish sequence higher. 

The 200-week SMA has acted as reliable support on multiple occasions in 2023-24 and is providing support again at the current week’s lows. The reliability of the 200-week SMA further enhances the case for a bullish reversal. 

 

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Trending