Crude Oil Weekly Technical Outlook

Written by Oil N' Gold
Crude oil rose further to as high as 70.32 last week but retreats mildly after touching 55 weeks and 55 months EMAs. While upside momentum is seen diminishing mildly, there is no indication of topping yet. Further rally is still in favor and sustained trading above the mentioned EMAs will path the way to 38.2% retracement of 147.27 to 33.2 at 76.77 next. On the downside, though, break of inner channel support (now at 64.53) will argue that rise from 43.83 has completed and focus will turn to 59.61 support for confirmation.

In the bigger picture, the question remains on whether the rise from 33.2 represent reversal in trend in crude oil, or it's merely a correction in the larger down trend. But in any case, rise from 33.2 should still be in force as long as 56.07 support holds. Sustained trading above mentioned 55 weeks and 55 months EMA will pave the way to stronger rally to 38.2% retracement of 147.27 to 33.2 at 76.77 next. On the downside, below 56.07 will be the first signal that rebound from 33.2 has completed and will turn focus to trend line support (now at 53.59) for confirmation.

In the long term picture, note that fall from 147.27 is treated as a correction, or part of the correction/consolidation to the five wave sequence from 98 low of 10.65. Downside target of 17.12/37.0 support zone is already met and the correction might have completed already. Sustained trading above mentioned 55 weeks and 55 months EMA will add some credence to this case and should target next key level of 90, (50% retracement of 147.27 to 33.2 at 90.23). This will remain the preferred case as long as crude oil continues to stay above the trend line support form 33.2 low.