Crude Oil – 4-Hour – Bulls Might Continue Their Reign

Theunis Kruger

Written on 26/07/2021 by Theunis Kruger, FX Trainer at FXTM

Crude Oil Bulls

The Crude Oil market on the H4 time frame was in a downtrend until 20th July, with 64.96 being the last recorded lower bottom.

A closer look at the Momentum Oscillator reveals a positive divergence between points a and b, compared to the prices at 65.48 and 64.96, which could have alerted technical traders that a potential new trend was on the cards.

After the bottom at 64.96, the market broke through the 15 and 34 Simple Moving Averages, with the Momentum Oscillator slicing through the zero baseline into bullish territory. This dramatic increase in bullish momentum further hinted that the imbalance to the supply-side has been disturbed and that the tide is turning.

A possible critical resistance level was formed when a higher top of 72.18 was reached on 26th July. Bears tried to tug the market lower but reached a support level at 70.34, and it currently looks like the bulls might continue their reign.

If Crude Oil manages to break through the critical resistance level at 72.18, three possible price targets can be considered from there. By attaching the Fibonacci tool to the higher top at 72.18 and dragging it to the support level at 70.34, the following targets can be calculated: the first is estimated at 73.32 (161.8%), the second price target can be forecast at 75.16 (261.8%), and the third and final target might be anticipated at 78.13 (423.6%).

If the support level at 70.34 is broken, the above scenario is invalidated.

As long as buyers maintain a positive sentiment, and demand overcomes supply, the outlook for the Crude Oil market on the H4 time frame will remain bullish.

Crude Oil H4 chart FXTM

For more information, please visit: FXTM

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Theunis Kruger

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