Crude Oil Price Forecast: Faces Resistance After Hitting Key ABCD Pattern Target

Crude oil advanced to a high of $69.97 on Tuesday before finding resistance and pulling back intraday. Consequently, the advance completed an initial target for a rising ABCD pattern at $69.87. Since resistance was seen around that price target, the market seems to have recognized the price level.

At the time of this writing crude oil is down for the day and may close below the midpoint of the day’s trading range, which is at $69.38. This suggests a possible rest or pullback before crude oil is ready to go higher. But that is only if today’s high is not exceeded and there is a decisive decline below the low of the day at $68.80.

Weekly Bullish Signal

Notice that the price level around today’s low may have some significance. It is near a previously marked price level established by an interim swing low from December at $68.82. Also, last week’s high was at $68.97. Once resistance is surpassed in an advance that price area is typically tested as support in some form. Therefore, today’s low was a successful test of support, and last Friday’s high of $68.97 was a test of resistance. That is a sign of strengthening. Moreover, a bullish continuation signal was generated on the weekly chart with a rally above last week’s high of $68.96 on Monday. That showed strength and established the beginnings of an uptrend on the higher time frame weekly chart.

Drop Below $68.80 May Test 20-Day MA

Nevertheless, if a drop below today’s low follows, there is potential support around $68.37 and the significant 20-Day MA, now at $67.97. Initial signs of a bullish reversal in crude oil triggered last week on a rally above the 20-Day line and downtrend line. Notice that they were identifying a very similar price level by the time the bullish reversal triggered last Thursday.

Given the extent of the of the recent bearish correction where the price of crude declined by $15.36 or 19%, it seems likely the current developing counter trend rally has more upside to go. That correction on a percentage basis was the largest of the prior larger four bearish corrections in crude oil, starting with the drop from the April 2024 peak.

Upside Breakout Targets $70.61 to $70.79

If today’s high is exceeded, then crude oil looks like it heads towards the next higher target zone from $70.61 to $70.79. That range begins with the 50% retracement and ends with a prior resistance level. Also, included within the range is the 127.2% extended target for the rising ABCD pattern at $70.81.

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