Crude oil has started to rise above the $ 25.00 level as hopes of a massive reduction in production by key OPEC members are helping to raise the price of oil.
Technical analysis of crude oil shows that the latest recovery has helped to form a bullish reversal pattern on lower timeframes.
Crude oil price developments over the medium term
Crude oil prices have started to rise due to optimism that Saudi Arabia and Russia could implement a large-scale supply cut.
Analysis of crude oil prices shows that the level of $ 25.75 is likely to act as a major pivot in the medium term.
Looking at the daily chart, the February 2016 low is around $ 25.75. The previously mentioned trough marked a major multi-year trough for the price of oil.
If the bulls can anchor the price above the $ 25.75 level, it is possible that oil prices will start to move in a much higher price range.
The December 2018 low, around the $ 42.00 level, could mark the top of the range if oil prices could gain traction above the $ 30.00 level.
Short-term trend in crude oil prices
Technical analysis of crude oil shows that the short-term trend remains bearish while prices are trading below the level of $ 42.00.
The shorter time frames currently show that the recent surge in oil prices has created a large reverse pattern of head and shoulders.
Analysis of the technical graph of crude oil over the one hour period shows that the neck of the model is around the level of $ 28.50.
The magnitude of the uptrend implies that oil prices could eventually rise to the level of $ 38.00 if the level of $ 28.50 is exceeded.
Technical summary of crude oil
Technical analysis of crude oil shows that continued gains above the $ 28.50 level could activate a bullish reversal pattern and rally to the resistance level of $ 38.00.
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