Oil bulls: Not done yet?

<p><strong>By <a href="http://investmacro.com/contributors/contributor-profile-forextime/">ForexTime</a></strong></p>
<ul>
<li>Crude oil now pulling back from year-to-date high</li>
<li>$90 psychological region tested for support now</li>
<li>Daily close below 21-day EMA may invite more declines</li>
<li>Elliot Wave theory suggests more eventual room for gains</li>
</ul>
<p>&nbsp;</p>
<h3>Oil bulls (those hoping prices will move higher) may just be taking a breather for the moment.</h3>
<p>Prices of US crude have pulled back since reaching the <strong>year-to-date high at $93.59</strong> on September 19th, but this may be short-lived.</p>
<p>The decline from this swing high was likely due to a couple of factors:</p>
<ul>
<li> a bounce off the <strong>upward rising channel’s resistance </strong>which has been tested three times since the rally starting from June 7th, 2023.</li>
<li>a <strong>technical pullback</strong>, after its 14-day relative strength has been in “overbought” territory (above the 70 threshold) for the two weeks prior</li>
</ul>
<blockquote>
<h4><em><strong>Notably, Crude is now testing the psychologically-important $90/bbl level for immediate support.</strong></em></h4>
</blockquote>
<p>The 23.6 Fibonacci retracement level also sits close by, at $89.92, to potentially lend stronger support.</p>
<p><img decoding="async" fetchpriority="high" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user16/CrudeDaily_1.png" alt="" width="1024" height="768" data-entity-type="file" data-entity-uuid="a3e4d849-8377-41d0-879a-667b6573b3b8" data-src="/s3-static/users/user16/CrudeDaily_1.png" /></p>
<p>&nbsp;</p>
<h3><strong>Potential support ahead</strong></h3>
<p>Crude oil prices are currently still above, albeit declining, towards it’s 21-day EMA.</p>
<p>A continued decline could see bears take advantage of this reversion to its mean to potentially test the following key support levels:</p>
<ul>
<li><strong>$88.31: </strong>21-Day EMA</li>
<li><strong>$87.65:</strong>38.2 Fib ratio</li>
<li><strong>$85.81: </strong>bottom upward ascending channel trendline, also the 50 Fib ratio line</li>
</ul>
<p>The Fibonacci retracement tool is applied to the daily time frame from 24th August’ low at $78.04 to the year- to- dates high.</p>
<h4></h4>
<h3><strong>More upside for Crude? Elliot Wave theory says “yes”</strong></h3>
<p>Taking Elliot wave count into consideration, crude oil has yet to complete the 3rd impulse move from wave 2’s termination at the $78.04 lows.</p>
<p>This suggests that Crude prices must reach at least <strong>$95.81</strong>, or potentially even break above the psychologically-important <strong>$100/bbl line</strong>, before the 3rd impulse move is deemed “complete.</p>
<blockquote>
<h4><em>In short, adhering to the Elliot Wave theory, this suggests there should be more near-term gains ahead for Crude oil.</em></h4>
</blockquote>
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<p><img decoding="async" class="size-full wp-image-54242 alignleft" src="https://www.investmacro.com/articles-analysis/wp-content/uploads/2014/07/Forex-Time-Logo.png" alt="Forex-Time-Logo" width="262" height="90" /><strong>Article by <span><a href="https://www.investmacro.com/contributors/contributor-profile-forextime/">ForexTime</a></span></strong></p>
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