Crude oil price keeps forming higher highs while holding the series of higher lows, a move that defines a bullish trend. The current run higher in the price of crude oil started in November when the pharma companies have announced the efficacy of the COVID-19 vaccines. Ever since, the crude oil recovered dramatically, triggering a move higher in equity markets around the world and a bearish move in the dollar.
The so-called reflation trade is ongoing. The move higher in the price of crude oil triggered similar price action in most other commodities. Copper had a great start of the year as well, so commodity currencies, like the Australian dollar or the Canadian dollar gains, are understandable.
The move higher in the price of oil corresponds to the belief that the world is about to put an end to the pandemic. As such, the economic bounce and the subsequent rise in demand for oil triggered the current bullish trend with no end in sight.
Crude Oil Technical Analysis
The market forms a rising wedge that might give some hopes to the bears, but the wedge remains in the bullish channel. Bears may want to try to short here with a stop at half the channel’s distance projected from the upper edge, but the target should not exceed the lower edge of the channel. Bulls remain in control as long as the bullish series is in place.
Crude Oil Price Forecast