For the purposes of this post on oil I’ve moved to the weekly chart for the commodity which continues to test the extremely strong level of price resistance at $66 per barrel, a level I have referenced many times in my analysis, and perhaps this is the week when we will see a continuation of the longer-term bullish momentum. And the reason is the gapped-up open and positive start to this holiday-shortened week which has seen the price open at $66.68 per barrel for the WTI contract and has since moved to trade at $68.26 per barrel at the time of writing.
Clearly much can change in the course of the week, but should we see a close above the resistance denoted with the red dashed line of the accumulation and distribution indicator, then this may be the precursor to a sustained move higher, and one which would also be supported by the fundamentals, with Memorial day kicking off the traditional US driving season.
From a technical perspective, it has been the resistance at $66 per barrel which has proved to be the stumbling block for oil since March and provided we see a solid close above this level, then it will undoubtedly provide a solid platform of support and for the price to test $70 per barrel and beyond.