Crude Oil Weekly Technical Outlook

Crude oil edged lower to 71.09 last week but formed a short term bottom and recovered. Further rise might be seen initially this week but we'd expect upside to be limited by 79.38 resistance and bring fall resumption. At this point, we still favor that case that choppy recovery from 64.23 has completed at 79.38 already. Below 71.09 will target a retest on 64.23.

In the bigger picture, recovery from 64.23 is treated as a correction to fall from 87.15 and has possibly completed at 79.38 already. Break of 69.51 will indicate that decline from 87.15 is likely resuming. This will also revive the bearish case that whole medium term rise from 33.2 is finished at 87.15, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. In such case, we'd see another fall to 50% retracement of 33.2 to 87.15 at 60.18 at least.

In the long term picture, current development suggests that rebound from 33.2 is finished at 87.15, inside 76.77/90.24 fibo resistance zone as expected. Our view is that fall fro 87.15 would develop into the third falling leg of the whole correction from 147.27 and hence, we'd anticipate an eventual break of 33.2 low in the long term as such correction extends.....Read the entire article.

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