Crude Oil Price Forecast: Crude Oil Reclaims $72.83, Targets Higher Resistance Levels

Crude oil further confirmed the recent swing low of $70.91 as support. On Tuesday, crude triggered a continuation of the rally from that low, reaching a new high of $73.99 for the bounce. Strength was also indicated by the reclaim of the 50-Day MA today, now at $72.83. Resistance was seen at the 50-Day line on Monday.

Today’s decisive breakout above the 50-Day line shows strength that should be sustained towards a test of higher prices. The day is likely to end with crude in a relatively strong position, in the top third of the day’s trading range. That top third of the range is above $73.54. Also, be aware that today’s low was a successful test of support at the 50-Day MA, which is a sign of strength.

Next Upside Target is $74.74

The next upside targets are the 200-Day MA at $74.74 and the 20-Day MA, now at $74.89. Notice that the 20-Day line is falling and close to converging with the 200-Day line. Each line presents potentially solid resistance on its own but more so if combined to identify a similar price area. Confirming the 200-Day line is the 38.2% Fibonacci retracement at $74.69. Together, they put a bull’s eye on a price zone from $74.6 to $74.89 and increases the chance of the price zone being tested as resistance.

Strong Resistance Looks Likely Around $75.85

Higher price targets start with the 50% retracement at $75.85. That price area is confirmed by the interim swing high at $75.82. The swing high is part of the bearish price structure for the recent correction as it was a lower swing high, relative to the recent $80.76 peak. Once support is successfully tested at the lower end of the week’s range, as seen on Monday, a swing back toward the top of the range is possible. This would be similar behavior to what is seen inside a consolidation pattern.

Once one side of the pattern is tested as either support or resistance, and a reversal sets up, the other side of the pattern becomes a potential target. If crude follows through as it might, the top of the weekly range at $75.82 becomes a target. Since the week’s high gives credence to the 50% target zone, it is possible that it is eventually reached. Moreover, the 50-Week MA is also nearby at $76.02.

For a look at all of today’s economic events, check out our economic calendar.