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The US crude oil futures contracts showcased a resurgence of positive momentum, steering away from their lengthiest series of losses since 2018 and attaining a recent peak at $71.77 per barrel in the previous trading session.
From a technical standpoint, the outlook leans towards optimism, buoyed by encouraging signals emanating from the Relative Strength Index, which maintains stability above the pivotal 50 midline. Moreover, there is a notable steadiness in trading above the robust support level of 70.70, with particular significance attached to maintaining a price above 70.50.
Anticipating a continuation of the upward trajectory, confirmation of breaching the $71.70 mark is poised to facilitate a move towards the initial target at $72.10, followed by $72.60 as the subsequent milestone. Further upward potential could extend to $73.30.
It’s imperative to underscore that sustaining trading levels above the critical threshold of 70.50 serves as a fundamental condition for activating the proposed bullish scenario. Conversely, a breach below this level has the potential to disrupt the bullish momentum, triggering a price retracement towards $69.85.
Caution is advised, acknowledging the elevated risk levels in the current market dynamics.
Three warnings accompany this analysis: Firstly, there is a recognition of the heightened risk levels. Secondly, the anticipation of high-impact economic data from the American economy, particularly the Consumer Price Index (CPI), which may induce significant price fluctuations upon release. Thirdly, the prevailing geopolitical tensions contribute to an increased risk environment, potentially resulting in heightened price volatility. Exercise prudence in navigating these conditions.
Note: Trading on CFDs involves risks. Therefore, all scenarios may be possible. This article is not a recommendation to buy or sell but rather an explanatory reading of the price movement on the chart.
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