WTI Crude Oil Forecast: Building Basing Pattern

Christopher Lewis

Given the fact that everything is starting to reopen again, we should continue to see crude oil go higher.

The West Texas Intermediate Crude Oil market has gone back and forth on Tuesday, as we are hanging about the $81 level. It is worth noting that the $80 level has offered a significant amount of support, and it appears that the 50-day EMA sits just below there in order to find quite a bit of support as well. Ultimately, the crude oil market has been bullish for quite some time, and I think that will continue to be the case going forward.

The 50-day EMA being broken to the downside could open up the possibility of a move down to the $75 level, but I think it would take quite a bit of downward pressure to reach down towards that area. The $75 level is what I considered to be the “floor in the market”, so I think if we do get down to that area, it should open up an excellent buying opportunity for a longer-term trader. Anything below there could kill the overall trend.

To the upside, the $85 level is more than likely going to be the target, and perhaps even a short-term ceiling. If we can break above there, then oil has room to run for quite some time, and perhaps even the ability to fulfill the longer-term target based upon the bullish flag, which at this point suggests that we could go as high as the $100 level. I think it would take a while to get there, but that is my longer-term target. Especially considering that the longer-term outlook for the market is that we are reopening, that should continue to drive the price of oil higher.

Recently, there has been a bit of concern that President Biden will release the Strategic Petroleum Reserve, but at this point it would only be a bit of a short-term fix for a market that is struggling with the overall supply/demand part of the equation. With this being the case, given the fact that everything is starting to reopen again, we should continue to see crude oil go higher. This is especially true now that OPEC has refused to increase output, and it is very likely that we will continue to see momentum pick up going forward. The candlestick for the trading session on Tuesday is very neutral, but it is preceded by three hammers, a very bullish sign to say the least.

WTI Crude Oil

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

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