Crude oil prices have been moving upward since December 14, 2023, when it hit a low of $67.708 per barrel. This is despite concerns about global demand, economic uncertainty, geopolitical tensions and a stronger US dollar. As of April, the price of Crude Oil has rallied to $87.81. Traders will be keeping a close eye on the upcoming Crude Oil Inventories report on Wednesday, as it may have an impact on the price of Oil.
Overview
Crude oil prices have been moving upward since December 14, 2023, when it hit a low of $67.708 per barrel. This is despite concerns about global demand, economic uncertainty, geopolitical tensions and a stronger US dollar. As of April, the price of Crude Oil has rallied to $87.81. Traders will be keeping a close eye on the upcoming Crude Oil Inventories report on Wednesday, as it may have an impact on the price of Oil.
High Impact Economic Events
Tuesday, 02:00 am (GMT+0): Industrial Production y/y (CNY)
Thursday, 06:00 am (GMT+0): Claimant Count Change (GBP)
Tuesday, 12:30 pm (GMT+0): CPI (CAD)
Tuesday, 10:45 pm (GMT+0): CPI (NZD)
Wednesday, 06:00 am (GMT+0): CPI y/y (GBP)
Thursday, 01:30 am (GMT+0): Unemployment Rate (AUD)
Friday, 06:00 am (GMT+0): Retail Sales m/m (GBP)
Technical Analysis
Crude Oil has been on an uptrend since December 14 of last year. The uptrend began after a reversal to the upside, which is known in technical analysis as a non-failure swing. Specifically, the trough marked at 67.708 fell lower than the previous trough at 68.809. Subsequently, prices rallied and exceeded the top at 71.946, which confirmed the non-failure swing. A series of successively higher peaks and higher troughs followed, indicating an uptrend. During this rally, prices found support at the dynamic support line of the 50-period Linear Weighted Moving Average and reached a year-high price of 87.813 on April 5.
However, recent geopolitical tensions had a negative impact on the commodity, which is reflected in the price chart by a sideways correction with conflicting signals such as a Shooting Star and Hammer. Yesterday, bulls entered the market with buy orders, pulling the price of Oil, which rebounded from the 50-period Moving Average.
The upward outlook for Crude Oil is also confirmed by the 50-period Moving Average and the Momentum oscillator.
Upside Potential Targets
If the bulls take control of the market, traders may consider the following resistance levels.
85.954: The first resistance aligns with the weekly Pivot Point estimated using the standard methodology.
87.813: The second level is 87.813, matching the year's highest price marked on April 5.
89.002: The third target is 89.002, representing the R2 weekly Pivot Point.
92.732: The fourth key resistance level is seen at the 423.6 percent Fibonacci extension of the swing traced by the peak at 83.568 and the trough at 80.827
Downside Potential Targets
Should the bears manage to dominate the market, there are three potential downside targets that traders may consider:
83.068: The first downside target is 83.068, which aligns with the 23.6% Fibonacci Retracement drawn from the trough of 67.708 to the peak of 87.813.
80.880: The second support is estimated at 80.880, representing an internal trendline.
77.61: An additional potential support could be identified at 77.61, representing the 50% percent retracement of the uptrend.
Conclusion
Crude Oil rebounded from yesterday's lows as traders seek direction amid geopolitical tensions. It is essential for traders to remain up-to-date on the latest world and economic developments, trade wisely, and closely monitor market trends to potentially optimize investment returns and mitigate probable risks and losses.