- Oil is rising up to a cluster of daily major moving averages in the $79.00s.
- These will probably present a tough level of resistance for the commodity.
- The persistence of the short-term uptrend will depend on a decisive break of this resistance barrier.
WTI Oil is trading in the $78.50s during the US session on Friday.
On the 4-hour chart used to assess the short-term trend Oil has decisively broken out a falling channel and reached the conservative target for the breakout at $78.17 (Fibonacci 0.618 extension of the width of the channel extrapolated higher).
Oil 4-Hour Chart
Since breaking out of the channel, Oil is probably now in a short-term uptrend with the odds favoring more upside in the short-term, given “the trend is your friend”. However, it has now reached its initial target so is vulnerable to a pullback.
A breakout above the last lower high of the prior downtrend at $80.36 (May 29 high) would provide added bullish confirmation and extend the uptrend higher. Such a move might be expected to reach the next key target at $83.50 (April 29 high and top of chart gap).
The direction of Oil is less clear on the daily chart used to assess the intermediate term trend.
Oil Daily Chart
The key feature on the daily chart is the cluster of resistance in the $79s from all three major Simple Moving Averages (SMA) – the 50, 100 and 200-day SMAs. This is likely to present a considerable barrier to more upside and could be an inflection point for Oil price.
It would require a close on a daily basis above $80.36 (May 29 high) to confirm a successful break above resistance from the three SMAs and a continuation up to a target at $83.50.
WTI Oil appears to be trading within a broad long-term range between $64.00 and $93.00 on the weekly chart. This suggests the long-term trend is probably sideways.
Oil Weekly Chart
Last week’s red club-shaped candlestick could be a sign the move down has completed and Oil price may be reversing. Similarly-shaped candlesticks often punctuate the end of down moves in asset prices. It is possible Oil price could be about to begin a bullish sequence higher.
The 200-week SMA has acted as reliable support on multiple occasions in 2023-24 and is providing support again at the current week’s lows. The reliability of the 200-week SMA further enhances the case for a bullish reversal.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD consolidates near two-week high, looks to US NFP for fresh impetus
AUD/USD holds steady around the 0.6335 area during the Asian session on Friday as traders now await the US NFP report. Bets that the Fed will cut rates further amid concerns over failing US economic growth keep the USD depressed near a multi-month low and act as a tailwind for spot prices, though tariff jitters warrant caution for bulls.
USD/JPY seems vulnerable amid divergent Fed-BoJ expectations; US NFP awaited
USD/JPY languishes near its lowest level since October touched on Thursday amid a bearish USD, led by bets that the Fed could cut rates multiple times in 2025 amid slowing US economic growth. Moreover, the hawkish sentiment surrounding the BoJ's policy outlook underpins the JPY and validates the negative bias for the pair.
Gold price remains depressed ahead of US NFP; trade jitters to limit losses
Gold price trades with negative bias for the second straight day, though a combination of factors continues to act as a tailwind ahead of the crucial US NFP report later this Friday. Rising trade tensions continue to weigh on investors' sentiment.
XRP investors enlarge realized profits to $2 billion despite potential inclusion in US crypto reserve
Ripple's XRP managed to record gains on Thursday despite investors expanding their total realized profits to about $2 billion since the beginning of the week.
Make Europe great again? Germany’s fiscal shift is redefining the European investment playbook
For years, Europe has been synonymous with slow growth, fiscal austerity, and an overreliance on monetary policy to keep its economic engine running. But a major shift is now underway. Germany, long the poster child of fiscal discipline, is cracking open the purse strings, and the ripple effects could be huge.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.