WTI crude looks set to retrace before its next big leg higher

WTI appears set tor a cheeky retracement. Volumes were falling during its leg higher from $68, and Wednesday closed with an exhaustion candle. Note the strong trading activity around $70 which indicates some bears were caught short and bulls initiated, which assumes short-covering helped fuel the rally and any retracement towards $70 could also be supported.

From here we’re looking for prices to revert to $70. But given the strong support around the June lows / $68 and false break of $70, the bigger picture view is for a bullish rally to develop following a retracement heading into the new year.

$80 seems feasible as an initial target, around the 200-day EMA. But as you’ll see in the next post, a bigger bullish reversal could be unfolding on the weekly chart.

Trade fermée: cible de profit atteinte:

The initial target to $70 was met near the year end, but price action since has been very choppy. Still, prices continue to hold above $70 and volumes are rising - could this suggest bulls are accumulating around these lows?

Given the rising risks that a regional conflict could materialise in the Middle East, upside pressure for oil could also be on the rise.