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

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

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.

For more information, please visit: FXTM

Disclaimer: This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.

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Nigel Frith

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.