Oil prices jumped to a one month high in European trading session on Wednesday, continuing gains after that U.S. crude stockpile data showed more than expected supply overnight. The West Texas Intermediate crude reached to a peak of $51.60 per barrel on Wednesday, April 5, 2017, the highest price since March 8th.
Oil has rebounded from $46.97 and been well-supported in previous sessions amid increasing speculations on production curb by major global producers.
Technically speaking, Crude oil price breached $50.00 level after closing and holding above this level in the daily candlestick, which signals that the price heads to overcome the negative pressure caused by the double top pattern formation shown in the chart below.
On the other hand, the price still remains below the previously broken bullish trend line which has turned into a solid resistance now at 51.60, meaning that breaking above this level is now required to confirm stopping the probable negative scenario, where MACD and OsMA oscillators suggest negative signals now that supports the strength of the mentioned resistance.
As a result, this contradiction between the bullish and bearish technical factors at this very tight zone, suggest that the next move is getting clearer in next couple of sessions. In other words, waiting for breaching one of the next keys represented by $50.70 support and $51.70 resistance, pointing that breaking each of them would fail the opposite scenario for another upcoming swing.
Breaking the support will turn the price to the bearish correctional track heading to its first target located at $48.20, while breaching the resistance will stop the negative pressure pushing the price to test the previously recorded top at $55.50 as the first target ahead.
From the timing point of view, a near term important time resistance is also due in Thursday, April 5, 2017, as it is 138.2% Fibonacci Time retracement of 2016 low to high. The rally took 214 trading days to raise the crude price from $26 per barrel to almost $56 in late 2016.
To conclude from both price and time analysis of the crude market, it is quite obvious that we’ve reached to a critical point where either direction has its own clues, therefore, waiting for the market to prove the next track would be the best strategy to follow in our belief.