Crude Oil Forecast: Looks For Support

(MENAFN- Daily Forex) During the Friday trading session, the crude oil market experienced an initial decline, yet it continues to attract buyers, indicating a possible bottoming process. Both West Texas Intermediate (WTI) and Brent crude oil markets have shown resilience, suggesting a potential upward trajectory in the near future.

The WTI Crude Oil market initially dipped during the session, touching the $75 level before rebounding, a sign of emerging strength. This market appears to be in a phase of self-correction, and it seems increasingly likely that an upward movement is on the horizon. A break above the recent candlestick patterns could set the $80 level as the next target. However, traders should be mindful of the 200-Day Exponential Moving Average just above this target, as it may pose a significant hurdle.

Support levels are evident beneath the current price, particularly around the $75 mark and then at $72.50. A breakdown below these levels could lead to short-term buying opportunities, but this would also mean navigating through considerable market volatility.

Similarly, Brent crude has seen a pullback, with the $80 level emerging as a key support zone. This level is not only psychologically significant but has also historically been a strong support area. The market seems to be recognizing potential value at this point, especially as buyers continue to engage. Additionally, the prospect of OPEC potentially reducing production in upcoming meetings is influencing market sentiment, as traders anticipate the impact of such a decision Prospects and Challenges in the Crude Oil Market

• Long-term charts indicate that we are at the lower end of a larger consolidation area, aligning with the current market behavior.
• This scenario strengthens the strategy of buying on dips, with the expectation of an eventual upward movement.
• Should the market break above the 200-Day EMA , we could even see a surge towards the $90 level.

However, it's crucial to consider the downside risks. A fall below the $75 level could lead to a significantly bearish turn for the market.

Both WTI and Brent crude oil markets are showing signs of a bottoming process, with key support levels holding firm. The anticipation of OPEC's production decisions and the positioning at the lower end of a broader consolidation range are contributing to a bullish outlook. While the potential for upward movement is strong, traders should remain vigilant of the inherent volatility and the possibility of downward shifts. The strategy of buying on dips, with a keen eye on key support and resistance levels, seems prudent in the current market scenario.

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