April Crude Oil futures are poised to close higher for the week after posting a strong recovery, following last week’s sell-off. Technically, the picture is clear, but the fundamentals continue to remain cloudy.
Technically, the weekly chart paints the most bullish picture. Firstly, this chart is still finding support because of the closing price reversal bottom at $44.37 from the week-ending January 30. This chart pattern was confirmed when the market traded to $55.05 the following week, but since then crude oil has tested both sides of a retracement zone at $49.71 to $48.45. Trader reaction to this zone is likely to set the tone for the next few weeks. The week is likely to end with an upside bias since the market is trading on the bullish side of this zone.
If traders can build a support base at $48.45 to $49.71, then the greater the possibility of a continuation of the rally becomes. The longer the support base, the more upside potential since it is often said that “the height of the market is determined by the length of the base”.
The weekly chart also indicates there is plenty of room to the upside. Give the break from $99.53 to $44.37, the first upside objective remains $71.95. This is a pretty optimistic target, however, which means bullish traders are going to have to get help from the fundamentals.
A failure at $47.80 and a sustained move under this level could trigger a retest of the main bottom at $44.37.…
