Crude oil prices have solidified the recent low of $70.91 as support, with a rally continuing from that point. On Tuesday, prices rose to a new high of $73.99, signaling further strength. Additionally, crude regained its 50-Day Moving Average (MA), now positioned at $72.83, a key indicator of market momentum. On Monday, this 50-Day MA acted as resistance, highlighting the significance of today’s breakout above it.
This decisive move above the 50-Day MA suggests that upward momentum could continue, with prices likely ending the day strong in the upper third of the day’s trading range—above $73.54. Importantly, today’s low marked a successful test of support at the 50-Day MA, further indicating strength in the market.
Next Target: $74.74
The next resistance levels are the 200-Day MA at $74.74 and the 20-Day MA at $74.89. Notably, the 20-Day MA is declining and approaching the 200-Day MA, creating a potential resistance zone. This price area is further reinforced by the 38.2% Fibonacci retracement at $74.69, with a target range of $74.6 to $74.89. This convergence increases the likelihood of this range acting as a key resistance zone.
Resistance at $75.85
Looking further ahead, the next target is the 50% Fibonacci retracement at $75.85, supported by the recent swing high at $75.82. This swing high represents a lower peak compared to the $80.76 high, indicating a bearish correction. If support at the lower end of the range holds, a rebound toward the upper end is possible, mimicking behavior seen in consolidation patterns.
As the price tests support or resistance within such patterns, the opposite side becomes a potential target. If the current upward momentum continues, the top of the range at $75.82 could be reached. Furthermore, the 50-Week MA is close by at $76.02, reinforcing the potential for resistance in this area.
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