On the daily chart below, we can see that soon after the flash crash into the $64 level, the price of crude oil rebounded strongly and has rallied back to the $73 support now turned resistance. We can see that the first breakout attempt failed, and the price moved lower into the $70 level. Since then, we started to get some positive news though.
The big miss in Jobless Claims wasn’t as bad as it seemed because there were fraud attempts in Massachusetts, the US announced that it will start to buy up to 3 million barrels for the SPR and the US retail sales beat expectations. The price is now hovering around the $73 resistance where there’s also the red long period moving average as an extra barrier. If we start to see the price breaking higher, it’s likely that the bullish momentum will increase, and the buyers may extend the rally towards the previous high at $83.
Crude oil technical analysis
On the 4 hour chart below, we can see more closely the price action around the $73 resistance and we can also see that there’s a 50% Fibonacci retracement level for further confluence. So, this is a strong resistance area, and a breakout can lead to a fast move afterwards. Today, we have the US Jobless Claims where the previous number is expected to be revised lower. The data is important and big deviations from the expected number should be market moving. A big miss should be negative for the crude oil market, while a beat may push the price above the resistance.
On the 1 hour chart below, we can see the short-term levels that traders should be focused on. On the upside, a breakout of the $73.50 high and 50% Fibonacci retracement level, especially if supported by a fundamental catalyst, should lead to a big rally. On the downside, a break below the recent resistance at $71.80, should lead to lower prices into the next swing low at $70. If the sellers break below the $70 level as well, then we may see a return to the $64 low.
