Oil Price Recovery Emerges Ahead of January Low

The price of oil recovers ahead of the January low ($64.37) to keep the Relative Strength Index (RSI) out of oversold territory.

Crude Oil Price Outlook

The price of oil extends the rebound from the monthly low ($65.27) to carve a series of higher highs and lows, with a break/close above $71.70 (61.8% Fibonacci retracement) bringing $74.00 (50% Fibonacci retracement) on the radar.

A breach above the monthly high ($74.41) opens up the $75.30 (61.8% Fibonacci retracement) to $76.30 (38.2% Fibonacci retracement) region but the recent rebound in crude may end up short-lived should the price of oil respond to the negative slope in the 50-Day SMA ($74.73).

Failure to hold above $68.50 (78.6% Fibonacci retracement) may push the price of oil back towards the monthly low ($65.27), with a close below $65.40 (78.6% Fibonacci retracement) raising the scope for a test of the January low ($64.37).

--- Written by David Song, Strategist at FOREX.com