This morning, the crude oil continues to trade bullish for the fourth consecutive trading day. Most of the bullish trend is driven by the expectations that producers are likely to extend output cuts for another 9 months.
The Organization of the Petroleum Exporting Countries (OPEC) will be meeting on Thursday, May 25th. Their agenda is to discuss output cuts by 1.8 million barrels a day. However, looking at the oil prices, there are strong sentiments that OPEC may cut the output by more than 1.8 million barrels.
If this happens, we will definitely see a huge volume of buyers entering the market. But personally, I think that the crude oil prices are already making their way upward based on the sentiments of the output cut. Having said that, we need to be prepared for potential reversals in crude oil prices.
It seems that the OPEC meeting will be the biggest market, in particular, for the WTI crude oil prices.
Forex Trading Idea
I will be looking to enter a sell position only below $50.85 with a stop loss above $51.10 and a take profit of $50.45.
Bullish Gap In Crude Oil – 4-Hour Chart
Technical Outlook – Intraday
First things first, there is a huge gap on the hourly chart of the crude oil. On Friday, the crude oil closed at $50.415 but today it opened at $51.230. As we have discussed earlier, the bullish Gap represents investors' buying bias.
However, these gaps are meant to be filled the same day or in the upcoming days. Therefore, the market may go for $50.40 in the case of breakage below the lower range of $50.85.
In addition, the upper range is $51.20 and upon breakage, the prices may head towards $51.60.
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