Crude Oil Price Forecast: Poised for Further Gains After a Rest

Crude oil completed a five-day advance on Monday with a high of 80.33. A 61.8% Fibonacci retracement was also completed at 79.97, while the 50-Day MA was at 79.58. Crude was able to close above the 50-Day line but not the Fibonacci level. Moreover, yesterday’s advance took the price of crude above the interim swing high of 79.67, triggering a bullish reversal in the price structure of the prior downtrend retracement. Subsequently, today crude took a rest and traded inside yesterday’s price range.

This Week’s High Completed a 11.2% Advance

Monday’s high completed an 8.09 point or 11.2% advance in the price of crude oil. Support was seen around the lower trendline of a large developing symmetrical triangle formation at 72.24. Once crude reverses off support at the bottom of the triangle, the top of the triangle becomes an eventual target. Therefore, given the strong bullish momentum seen since the reversal from the 72.24 low, it seems likely that the top line will be reached in this case. Prior to the top trendline, there may be signs of resistance around the 78.6% Fibonacci retracement at 82.07.

Measured Moves Point to 84.15 Target

Notice that the prior two advances saw the price of crude rise by 12.01 points or 16.5% and 16.51 points or 23.1%, respectively. Note that the 23.1% rally is only measuring the portion of the advance where momentum spiked (purple arrow) and therefore it does not measure the full move. The current advance was up by 8.09 points or 11.2% at Monday’s high. Based on this metric alone, crude should continue to rally following a pullback.

Potential Symmetrical Triangle Breakout

A match with the 16.5% advance will occur if crude oil reaches 84.15. That would put it above the top trendline and therefore a bullish breakout of the symmetrical triangle would have already occurred. Since March 2023 there have been seven upswings that measured between 14.5% and 30%. So, it is not a stretch to anticipate a 16.5% advance for the current rally. And since that is the low end of prior measured moves, the 84.15 target could easily be exceeded. Especially, since a symmetrical triangle breakout opens the door to higher targets.

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