crude oil prices

Crude Oil Price Holds $60 but Meets Dynamic Resistance

The main theme of the trading year so far is the remarkable rise in crude oil price. The price broke out of a bullish flag in November 2020 and did not look back ever since.

As a consequence, inflation expectations are on the rise everywhere, especially in the United States. Five-year inflation expectations in the U.S. exceeded 2%, and the Euro-area, Japan, and the United Kingdom follow closely. Given there is no pullback in the crude oil price, expect more of the same in terms of inflation, which, in turn, explains the high stock market prices and a low dollar.

The price of oil benefits now from another development – the extreme cold that affects the Northern hemisphere, with the United States affected by power shutdowns. Also, the oil industry in Texas functions at reduced capacity due to the same extreme weather conditions. All these factors bode well for oil, and we should not be surprised to see even higher prices.

Crude Oil Technical Analysis

However, the price of oil has recently met dynamic resistance on its way above $60. While the move does look parabolic and a short trade here is a contrarian, we might just see a pullback into the lower half of the rising channel. Because of the sharp move higher, bulls may want to buy the dip into the lower edge with a stop on the previous higher low and a target at a new higher high.


Don’t miss a beat! Follow us on Telegram and Twitter.

Crude Oil Price Forecast

More content

Related Posts: