In the early Asian session , Crude Oil, #CL, is trading above the SMA of 21, and rebounding after having touched its highest level since October 2018 at $ 74.22. In the 4-hour chart, we can see a shoulder-head-shoulder formation. If this pattern is confirmed, there should be a break below 72.50.
A Wall Street Journal report affirms that OPEC plans to increase the group's production by 500,000 barrels per day. This decision could be unveiled at its meeting next week. Such encouraging prospects seem to be supporting crude prices.
The 4-hour chart shows the SHS reversal pattern. We can also notice that the formation of a fractal in the last hours of trading has left small body candles and wicks, which means that there could be an imminent correction movement in the next few hours.
The SMA of 21 now acts as a key support. If the price of crude remains above 73.18, there may be a potential upside to the 8/8 zone of murray located at 75.00.
On the contrary, if Crude Oil, #CL, consolidates below 73.10, there is the SMA of 21, so it will be a good opportunity to sell with targets at 7/8 of murray at 71.88. If the downward pressure is very strong, the price could fall to the psychological level of 70.00.
The technical reading of the eagle indicator is showing a sign of exhaustion. We have drawn a bearish channel in the zone of the moving line of the indicator, which means that the indicator signal could find resistance and this could influence crude oil prices.
Our recommendation is to buy above 73.20 with targets at 75.00 and sell below 73.10 with targets at 71.88 and 70.00.
Support and Resistance Levels for June 25 - 28, 2021
Resistance (3) 75.04
Resistance (2) 74.34
Resistance (1) 73.82
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Support (1) 72.79
Support (2) 71.80
Support (3) 71.27
