WTI reached the level of 121.04 on May 31, a price level that was last seen on March 9th.
Around this high of 121.00, there is a strong resistance of 3/8 Murray located at 118.75. On previous occasions it has acted as a strong resistance. If WTI trades below this level, a technical correction could occur.
Crude oil (#CL) is being supported by easing restrictions in China, a factor that contributes to improving crude oil demand expectations and therefore raises the price of crude oil and Brent.
Another factor that keeps the price of WTI rising is the refusal of the Organization of the Petroleum Exporting Countries and its allies to increase the rate of production.
Early in the Asian session, WTI opened with a bearish gap and reached the support of 2/8 Murray around 112.50 in the early hours.
This GAP that left crude oil at 115.57 is likely to be covered in the coming hours. However, it should consolidate above 112.50 (2/8 Murray) and could reach the resistance of 118.75 again.
Conversely, if the bearish force intensifies, crude oil has strong support around the 21 SMA located at 111.05. Around this level, there will be an opportunity to buy, in case there is a technical bounce, with targets at 115.60 and 118.75. The price could even hit 4/8 Murray at 125.00.
Crude oil is expected to trade in the range of 118.75 to 111.05 in the coming days. Around this level, there will be an opportunity to buy above the 21 SMA or to sell below the 3/8 Murray.
A close on daily chart below 111.05 could accelerate the bearish move and the price could reach 1/8 Murray around 106.25 and could even reach the bottom of the uptrend channel formed in December 2021 at 105.00.
Our trading plan for the next few hours is to buy above 112.50 or around 111.05 (21 SMA), with targets to cover the gap left at 115.57 and 118.75 (3/8 Murray). The eagle indicator is in the positive zone which is likely to have a technical bounce in the next few hours.