Crude oil prices have been hovering in a tight range bound during the last few days due to a relative balance of bearish and bullish factors. Although the current consolidation in WTI may be a sign of buyers’ fatigue and may lead to a short term local bearish correction, but no signs of mid-term correction has been observed as the peaks in price and corresponding oscillator still converge, showing no signs of weakness. Since peak of $64.60 in mid-January, the WTI started a smooth retreat and slipped to the $62.72 low, the resistance equivalent to mid-2015 highs which have been turned to a near term support. This decline is to retest previously broken resistance and also interpreted as regaining momentum to continue the main bullish trend toward higher targets which are going to be mentioned in the following lines.

Among the bullish drivers, there are raising hopes of increasing global oil demand due to economic picture worldwide, a weakest greenback in past couple of years, high discipline among OPEC members, as well as another expected weekly drawdown in U.S. stockpiles. On the flipside, investors are worrying from increasing odds of crude oil production in the U.S. as higher prices at some point can trigger a new wave of shale revolution.

As mentioned earlier and will be discussed in further technical details in the following paragraphs, although no serious signs of a big correctional wave has been spotted, we do not expect a sharp hike in prices from current levels as resistive factors affect the bullish outlook of the oil market.

By having a look at the chart of WTI on a daily basis below, a healthy and robust upside trend is obviously recognizable. Quite academically, price has retested the resistances each time breaking above them, forming a clear higher highs above higher lows. As far as this pattern has not been damaged, investors still look for higher targets.

From the technical perspective, $63.40 is %161.8 Fibonacci Extension from Dec 2016 to June 2017 high-low. One of the key levels and targets of the bullish move, now has been penetrated and held above. This level is considered to support prices in case of any decline which can extend to $59.90 if broken below. On the other hand, the %200 Fibonacci Expansion of mentioned wave is located at $68 zone and is considered as the near term station, meaning that we expect the price to challenge this level before any attempt to rise further. The next main target of the current bullish wave is located at $71.15 which is simultaneously the overlap of the bullish channel line and also %100 Fibonacci Extension of 2016 rise followed by the decline in 2017.

At the end, we will continue to suggest the bullish trend on the short term basis conditioned by holding above $63.40 and the most important above $62.72 levels in order for the prices to reach $68 followed by our main target of $71.15.