Crude Oil Price Forecast: Rally Targets 89.23 Amid Bullish Momentum

Crude oil looks to be in the process of completing a bottom from a bearish retracement from yesterday’s low of 80.96. That swing low successfully tested support at the prior interim swing high of 81 from May 29. Also, a 50% retracement was completed at 81.23. A strong intraday rally followed generating a green reversal candle and a strong daily close. The close was in the top quarter of the day’s range and back above the 20-Day MA (purple).

That was a quick recovery following a dip below the 20-Day line earlier in the session. Further, notice that the area around an earlier long-term downtrend line retained support. The line was kept on the chart for this purpose. It provides an additional indication for support on weakness.

Bullish Reversal Above 82.81 Triggers

A bullish reversal triggered today with an advance above Wednesday’s high of 82.81. Crude continues to trade near the highs of the day at the time of this writing, following a successful test of support at the 20-Day MA earlier in the day’s trading session. Notice that both today and Tuesday, crude found support around the 20-Day MA. It will be a slightly stronger close above 82.81 rather than below it. Nevertheless, the bullish reversal sets the stage for crude to challenge the recent swing high of 84.74.

Second Breakout Above Trendline may be Next

An upside breakout through the top trendline that triggered last week failed to follow through leading to this week’s retracement. Today’s bullish reversal may be the beginning of a rally that could trigger a second breakout that may see greater success. Notice that resistance around the downtrend line was tested over four days but demand was not strong enough to take it forward. Furthermore, last week’s high completed a relatively aggressive 16.5% rally in 23 trading days. In other words, it was extended and overdue for a retracement.

Bull Trend Continues Above 83.01

Going forward, a rally above today’s high, currently at 83.01, will trigger a continuation of the rally off yesterday’s low. There are two trendlines the cross around 83.80 and that area may present some resistance. Nonetheless, a decisive breakout above last week’s high of 84.74 triggers a continuation of the bull trend that began from the early-June swing low.

Measured Move Targets 89.23

Taking into consideration previous measured moves in crude (marked on chart), it looks like crude has the potential to reach the 89.23 price area before this rally is complete. That price level would complete a 23.1% advance and match the lowest performance of the earlier strongest rallies, since the March 2023 swing low. Notice that 89.23 is within a larger Fibonacci confluence zone target.

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