Following an agreement between OPEC and Russia to extend oil production cuts out to March 2018, crude oil prices are trading at their highest levels in two weeks and also back near $50 per barrel. From a technical perspective, though, today’s price action is much more noteworthy. After failing to break out above resistance in late February (point A in chart), crude oil prices fell sharply, bounced at trendline support (point B), then made a lower high (point C). Following that lower high, oil sold off again, but this time that trendline offered little in the way of support (point D). Normally, when that type of support breaks, it turns into resistance going forward, but as crude oil prices have rallied overnight, the commodity is poised to move not only back above that trendline, but also back above its 50 and 200-day moving averages all in one shot. If it holds, that would be killing three birds with one stone!
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