Crude Oil Price Forecast: Gains Momentum, Eyes Key Resistance Levels Above 71.83

Crude oil is on track to complete a second strong daily bullish move on Thursday that indicates improving demand. It follows yesterday’s daily bullish reversal that ended with a wide range green candle that closed near the highs. Today’s advance filled a gap from last week and kept on rising.

At the time of this writing, crude oil continues to show strength as it is trading near the highs of the day and may close nearby. That would keep crude in a bullish position to test higher price levels. Although a minor signal, on the way up today crude also recaptured the downtrend line that starts from the July highs.

Resistance Zone From 71.83 to 73.21

Next up, there is a potentially significant resistance zone a little higher, starting from 71.83 and rising to 73.21. The higher level is the 50% retracement, which should be watched in concert with the most recent interim swing high at 73.15. The price range starts with the 38.2% Fibonacci retracement level. Also, included with the range is potential resistance around the 50-Day MA at 71.96, and the 20-Day MA at 72.27.

Nonetheless, the 73.15 swing high is the key pivot as a breakout above starts to reverse the price structure of the short-term downtrend. A bull breakout above 73.15 would provide a renewed sign of strength once there is a daily close above it. Further, the moving average trend indicators would have been exceeded by then.

Consolidation Pattern May Be Evolving

The large symmetrical triangle pattern in crude oil has been discussed before. A bearish breakdown triggered at the beginning of September, and it was followed by a bullish reversal that rose back into the pattern. Subsequently, another breakdown from the pattern triggered. Given that crude continues to chop around it is possible that the consolidation pattern has evolved into a larger triangle.

That may account for the lack of follow-through. Nevertheless, it is not clear yet. The initial lower boundary line of the triangle, that is now around the 61.8% Fibonacci retracement level at 74.60, may continue to provide insights if it is approached again. The question is, will it lead to a bearish reversal or a bullish breakout?

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