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Recovery could reach $54.50: Crude oil price analysis

By Nathan Batchelor

Crude oil price analysis shows THAT the recovery from the $49.40 level is gathering pace. Sellers may look to enter back into the current bearish trend from the $54.40 to $55.00 area.

The price of crude oil has started to stage a marginal upside recovery above the $50.00 level, after recently falling to its weakest level since January 2019.

Crude oil technical analysis shows that the price of crude oil could recover towards the $54.50 to $55.00 technical area before sellers return.

Crude Oil medium-term price trend

Crude oil is starting to trade back above the $50.00 level, as the recent wave of selling pressure starts to subside.

The latest bounce from the $49.40 level has been fairly weak in comparison to the recent steep reversal from the $65.00 level.

Crude oil price analysis over the medium term shows that the recent recovery is expected to continue while price trades above the $50.90 level.

The Ichimoku indicator on the daily time frame is showing that key upcoming resistance is located at the $54.50 level.

With this in mind, traders may look for weakness around the $54.50 level to sell oil from a more attractive entry point.

A break above the $54.50 area, could see oil prices rallying towards the $58.00 level, although this appears unlikely at this stage.

Crude oil short-term price trend

Crude oil technical analysis highlights that a bearish bias is in place over the short term while price trades below the $55.50 level.

The Ichimoku indicator on the four-hour time frame is showing that price is now trading above the Ichimoku cloud, and is set to target the $55.00 level.

Crude oil technical analysis chart continues to show a large head and shoulders pattern, with the neckline of the pattern located around the $51.40 level.

Traders should be aware that the downside potential of the head and shoulders pattern extends down towards the $40.00 level.

With this in mind, more aggressive traders may sell a retest of the $55.00 level, or wait for sustained weakness below the $51.40 level to initiate fresh sell positions.

Crude oil technical summary

Crude oil technical analysis shows that a recovery towards the $54.40 to $55.00 area may take place before the next down move occurs. A large head and shoulders pattern is still valid on the lower time frames.

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