Crude Oil Price Forecast: Hits 11-Week High, Challenges Key Resistance Levels

Crude oil continued to follow-through on its recent breakout of consolidation and bull flag on Thursday, with a rise to an 11-week high of 73.96. That put crude above the interim swing high of 73.27 from early-November before an intraday pullback began.

Nonetheless, crude is on track to close strong, above the 72.27 level and in the top third of the day’s trading range. This puts it in a position to continue to strengthen and challenge higher target zones, if it can maintain upward momentum.

50% Bullish Retracement Exceeded

Today’s advance completed a 50% retracement at 72.97 and exceeded an initial target for a rising ABCD pattern (red) at 73.12. That behavior shows strength but the next higher target zone from 74.29 to 74.42 will likely have greater significance.

It includes an internal downtrend line that connects to the October swing high, plus the 127.2% extended target for the rising ABCD pattern (red) at 74.29, and the 61.8% retracement at 74.22. Subsequently, if gold can sustain a rally above 74.42, it has a chance to challenge a potential resistance zone from around 75.78 to 76.74.

Faces Potentially Significant Resistance

Notice that the long-term downtrend line, which is also the top boundary line for a symmetrical triangle formation, converges with that price zone, along with the 200-Day MA at 75.91 and the 78.6% retracement level at 76.47. Until there is a rally above the 200-Day line, followed by a daily close above it, the potential for a bearish continuation of the triangle breakdown that triggered at the beginning of September, remains. If it is going to follow through in a bearish fashion, then resistance will likely eventually be seen in the current rally attempt, leading to a downturn.

Monthly Chart Turns Bullish

Monthly strength improves the chance to challenge higher targets as noted above. The longer-term monthly chart (not shown) should also be considered. Today’s advance triggered a bullish monthly breakout as the December high of 72.27 was exceeded. The close today will likely be above last month’s high, providing further evidence of strength. This is the first month in three that crude was able to rise above a prior month’s high.

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