Technical Analysis
Double Bottom or Bear Flag?
Crude oil has bounced sharply from the $55–56 area and is now testing the lower edge of a confluence resistance zone marked by:
- 50-day moving average at $64.30
- Horizontal supply region around $63–65
- Prior breakdown zone from April
The $55.12 level remains as support.
This pattern could be interpreted as either:
- A W-bottom formation (double bottom), or
- A bearish flag retracement if the $64 area holds as resistance.
RSI and Momentum
- RSI has climbed rapidly and just breached 50, currently at 50.84 – a bullish shift in momentum.
- The RSI moving average at 41.48 is turning higher – momentum is building.
- No overbought warning yet, which leaves room for upside follow-through.
Pivot Levels & Context
- Pivot Point (P): $61.87 – currently just above, supportive on pullbacks
- R1: $68.62 – aligns with the upper edge of resistance and near 200-day MA
- S1: $51.46 – next strong support if breakdown resumes
Key Levels
| Type | Price Area | Notes |
|---|---|---|
| Resistance | $64–65 | 50MA, supply zone, breakdown pivot |
| Resistance | $68–70 | 200MA, swing level, fib retracement |
| Support | $55.12 | Double bottom neckline/support floor |
| Support | $51.46 | Next major support (S1 pivot) |
Macro & Narrative Watch
Crude oil has recently been weighed down by:
- Stronger U.S. dollar (though it has recently stabilized),
- Ongoing demand concerns tied to slowing Chinese and global industrial activity,
- Potential SPR replenishment delays and U.S. supply stability.
However, there’s growing talk of:
- Possible OPEC+ production discipline,
- Seasonal demand increase heading into summer driving season,
- Middle East geopolitical tension (always a wildcard).
All of which are helping to underpin this bounce.
Bull Case
- Price forms a clear double bottom off $55.12
- RSI turns up, reclaiming 50
- Clean reclaim of $64.30 would likely open room to $68.50–$70
- Could start a larger reversal if macro backdrop stabilizes (e.g., Fed pause, dollar softness)
Bear Case
- Bounce still below both major MAs and within clear resistance
- Failure at $64.30 would reintroduce the bear trend
- Breakdown back below $60 would likely revisit $55.12
- Macro backdrop remains fragile, especially if demand data worsens
Final Outlook
| Time Frame | Bias | Commentary |
|---|---|---|
| Short-term | Neutral-Bullish | Technical bounce underway, short-term momentum favors upside to $64–65 |
| Medium | Neutral | Needs close above $64.30 and 50-day MA to confirm reversal |
| Long-term | Bearish to Neutral | Still below downtrend line and 200-day MA; macro narrative not fully supportive yet |
Bottom Line
Crude oil is staging a credible rebound from oversold territory, but it faces a major technical and narrative test at $64. The next two sessions will be key. A confirmed close above $64.30 would mark the first higher high since March — opening the door for a broader trend shift.
