Crude Oil Price Forecast: Can Bulls Push Above Key Resistance?

WTI crude oil is testing key resistance after a strong recovery, with a breakout potentially opening the path toward higher Fibonacci targets.

WTI crude oil stalled its advance at a high of $81.59 on Tuesday, as it completed a breakout above a downtrend line and a lower swing high from the prior decline. Resistance near the high is being tested near the confluence of a prior swing low from April at $81.94 and a 127.2% Fibonacci projection for a rising ABCD pattern, beginning from the recent low of $67.73. On Thursday, trading remained inside Wednesday’s range, which was contained within the range from Tuesday. This pattern shows a small potential bullish pennant, which may be easier to visualize on an intraday chart. The consolidation is now creating a short-term decision point, with a breakout needed to confirm whether the recovery can continue.

The formation of the small pennant consolidation has confirmed support near prior resistance from the lower swing high at $79.23. That is short-term bullish behavior. Nonetheless, a decisive breakout signal above $81.59 is needed to show a continuation of the current advance. The price of crude oil had risen by as much as 20.5% from the recent low, as of Tuesday’s high. Therefore, some consolidation or a pause near current levels would not be unusual following such a strong advance.

Despite short-term signs of underlying strength, a pullback to test support near the downtrend line would also be normal behavior. Once support is found near that line, buyers may start to move in more aggressively. A couple of possible support levels can be observed along with the trendline. There is the recent higher swing low at $76.61 and the 200-day moving average near $75.39. Since a reclaim of that average recently occurred, after crude oil traded below it for a relatively brief period, an eventual test of support near the 200-day moving average would be healthy for the potential bullish recovery now underway. Nonetheless, the next upside target for crude oil is near the 161.8% Fibonacci projection of the rising ABCD pattern at $85.20 and the falling 50-day moving average, which is currently near $86.01 but would likely be closer to the pattern target if reached later by price. A successful breakout above current resistance would keep the recovery intact, while a pullback that holds support would further validate the improving trend structure.