Saturday, 10 June 2023 09:50 GMT

Crude Oil Forecast: Looks Ready To Have A Short-Term Rally

(MENAFN- Daily Forex)
  • The West Texas Intermediate (WTI) crude oil market rallied during Wednesday's trading session, approaching the 50-Day Exponential Moving Average (EMA).
  • This breakout from a triangle pattern suggests a likelihood of further upward movement. The next prominent target for the market is the $75 level, as crude oil tends to favor transitioning from one round figure to another.
  • Subsequently, we could witness the market aiming for the 200-Day ema , positioned just below the $80 level.

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Beneath the current market price, the $70 level holds significant importance and is expected to provide substantial support. Only a breach below this level would introduce the possibility of a decline towards $65. The market remains characterized by volatile and erratic behavior, necessitating caution regarding position sizing. However, in the short term, an upward trajectory appears probable.

In the case of Brent (UK Oil), a considerable rally was also observed during Wednesday's trading session, with a breakthrough above the $70 level. This breakthrough presents an opportunity for the market to target the 50-Day EMA. Moreover, the potential for a move toward the $85 level becomes apparent. Conversely, if the market were to reverse, the $75 level would attract attention as a critical area of interest, followed by a potential drop to the $70 level.Be Cautious

If surpassing the 50-Day EMA and the $80 level, we could anticipate an influx of "fear of missing out (FOMO)" trading as market participants chase returns. However, whether the market can break out above the upper boundary of the overall consolidation near the $87.50 level remains uncertain. Such a breakthrough would indicate a highly bullish sentiment and potentially establish a "buy-and-hold" situation for oil. On the downside, a breakdown below the $70 level could trigger a more significant market decline, leading to challenging conditions.

To summarize, the WTI Crude Oil and Brent markets demonstrated strength and the potential for upward movement. The WTI market's breakout from a triangle pattern suggests a higher target at $75, followed by a possible advance toward the 200-Day EMA near $80. The $70 level is likely to provide crucial support. In the case of Brent, surpassing the $70 level opens the opportunity to target the 50-Day EMA, with a potential move towards $85. Attention should be paid to key levels such as $75 and $80. Traders must remain cautious due to the market's volatile nature.

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