Crude Oil Shoots Up – Butterfly Played Well
Arslan Butt • 1 min read
Recalling our earlier forecast Butterfly Drives Buying, crude oil traded well in line with our analysis to hit 56.028 take profit. Buying was triggered after another round of escalation between the US and Iran. Moreover, oil prices gained momentum on the more upbeat economic outlook.
Investors continue to trade crude oil with bullish bias after Iran shot down a US drone on Thursday. The US states that the drone was in international waters, while Iran states that the drone had accessed Iranian airspace. Anyhow, this resulted in massive demand for crude oil, boosting its prices.
Crude oil formed a bullish butterfly pattern on the daily timeframe, which was suggesting a strong bullish bias. Pattern completed its C to D move from 64 to 50 before triggering bullish retracement.
WTI oil retraced 50% Fibonacci of the May-June decline and got to 57.25. If the price overcomes this level, it will be able to get to 61.8% Fibo and 100-day MA at 58.60. This level will represent a more severe obstacle for buyers.
On 4-hour chart, the 200-period MA stays at 57.55 and it would be sensible to buy WTI on the break above it. A decline below 56.60 will open the way down to 55.62.