Crude oil prices have been struggling to form a new month high, as traders continue to sell rallies towards the $43.00 level.
Crude oil technical analysis shows that a bullish flag pattern suggests a coming upside breakout towards the $44.50 area.
Crude oil medium-term price trend
Crude oil prices are set for a major directional move this week, as price consolidates in a narrow trading range.
Crude oil price analysis shows that a strong technical correction may take place before the next major rally commences.
The $42.00 level is the location of crude oil’s 200-day moving average, which is a key indication of the overall price trend.
Furthermore, crude oil has already started to weaken below its 50-day moving average, around the $42.30 level.
Technical analysis on the daily time frame shows that crude oil is trading within a rising price channel, between the $40.70 level and $44.50 level.
Failure to rally price above the $42.30 level could cause a sell-off in crude oil towards the bottom of the channel, around the $40.70 level.
Dip-buyers may be waiting around the $40.70 level, in anticipation of a counter-rally towards the top of the rising price channel.
Crude oil short-term price trend
Crude oil technical analysis shows that a short-term bullish bias remains in play while the price trades above the $41.70 level.
Crude oil technical chart analysis on the one-hour time frame shows that the price is trapped inside a bullish flag pattern. Typically, bull flag patterns often indicate that an asset will eventually break to the upside.
According to technical analysis, the bulls flag is located between the $40.10 and $42.60 levels.
Bulls have failed on numerous occasions to force an upside breakout, which may mean crude oil may need to test the bottom of the channel before once again heading higher.
Once a breakout from the channel takes place, a powerful $2.00 directional move should take place.
Crude oil technical summary
Crude oil technical analysis highlights that downside momentum will increase if sellers breach the $42.00 support level. The $40.00 area is seen as a short-term bearish target.