Crude Oil Forecast: Price Faces Key Resistance Level

Crude Oil Forecast: Price Faces Key Resistance Level

Oil corrected lower then stuck in a sideways move. Will bears lead the price action or will bulls come back?

Oil Price Technical Analysis

· Oil Price Corrected lower

· Negative outlook while below $39.60 for Brent and $36.32 for WTI

Crude Oil Price Edged Lower

In late August, an upward trend led Brent oil to a six-month high at $46.51 than retreated after as bulls seemed to cut back. Last week, the price retreated further and closed in the red with a 6.2% loss, while the US oil closed with a 3.7% loss.

This week, the Relative strength index (RSI) has risen from 30 to 44 highlighting that bears were losing momentum.

Brent Oil Daily Price Chart (July 3- September 16, 2020)


Last week, the Brent oil failed on multiple occasions to move to the lower trading zone, reflecting the bear’s hesitation to press even lower. As a result, the price traded in a sideways move and pointed higher eyeing a test of the high end of the current $39.60 - $42.50 trading zone.

A daily close above the high end of the zone at $42.50 may send the price towards the weekly resistance at $45.15 (July 2016 low).

On the flip side, a failure in closing above the high end of the zone could reverse the price’s direction to re-test the low end of the zone at $39.60. A further close below that level could send the price even lower towards the monthly support at $37.00 (a psychological level).

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US Oil Daily Price Chart (June 3- September 16, 2020)


Last week, the US crude oil rebounded from the low end of the current $36.32 - $42.23. Consequently, the price pointed higher hinting to test the high end of the zone.

A daily close above the high end of the zone at $42.23 may encourage bulls to extend the rally towards the monthly resistance level at $45.38 (August 2017 Low).

On the other hand, a failure in closing above the high end could reverse the price direction towards the low end of the zone at $36.32. A further close below that level could mean more bearishness towards $34.27.

The information presented herein is prepared by Mahmoud Alkudsi and does not intend to constitute Investment Advice. The information herein is provided as a general marketing communication for information purposes only.

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