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Crude Oil Forecast: Continues to Build a Case for a Move HIgher

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

Signs of a potential breakout as WTI and Brent hover near key resistance. Focus on $85 for WTI and $89 for Brent amid increased demand.

  • Over the past two trading sessions, crude oil has been a little erratic, retreating early in the Friday session.
  • Nevertheless, the market continues to consolidate just below a significant resistance barrier, and it may be beginning to indicate that a breakout is imminent.

WTI Crude Oil

Crude Oil Forecast Today - 26/02: Oil Builds Case for Rise (Graph)

A small retreat was seen in the WTI oil market throughout the trading session. Friday, given that, all else being equal, we continue to witness a great deal of loud behavior. I believe you were observing this market near the 200-day EMA. Of course, there will still be some price magnetism around the 200-day EMA. The 50-day exponential moving average is shown below, and it also plays a role in providing support. I believe that this market will be extremely tough to short in general, so as long as we continue to drop like this, I will continue to purchase and then exit the position at the top of the range. On the longer term chart, we are starting to resemble a head and shoulders that have been turned inside out or a bottom that is rounding out. In the WTI grade, $85 would probably be the aim if we can break over the $80 mark.

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Brent

Brent Oil Forecast Today - 26/02: Oil Builds Case for Rise (Graph)

Brent is in an identical circumstance. Brent is circling the 200-day moving average (EMA) and the 50-day EMA beneath it, providing support at the $80 mark. I see the $84 level above as a major hurdle, and 89 could be the next goal if we can break over it. Dips that last a short while still present purchasing chances. And I do think there are a lot of reasons to assume that oil will rise, even though it will be quite noisy. First of all, there is seasonality; during this time of year, there is a significant increase in the demand for oil. Moreover, there has been a slight decrease in supply. Of course, central banks all over the world are also trying to lower interest rates, which can enhance demand when economic activity picks up. Given that, I do believe that this market will eventually break out and rise higher. I'm merely buying dips and using the short-term charts as a result in the interim.

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Christopher Lewis
About Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
 

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