The price of oil dropped sharply on Wednesday and Thursday, but Friday's rally erased some of the losses and, more importantly, oil remained above the bullish trend line from August lows. It was trading at more than 1 per cent stronger on Friday, hovering slightly below the 72 USD level.
Yesterday, bears pushed the price slightly below the uptrend line, which is currently at around 71.20 USD, but today's dip buying brought the price back above the trend line. As long as the price remains above this line, the outlook still seems bullish.
The next target for bulls could be at previous highs, which are located near 72.80 USD and, if this resistance is broken, further rise toward 74.30 USD might occur quickly. The greenback has been falling in recent days and inflation slowed notably, meaning oil could be supported by these factors in the near future.
On the downside, support might be at the mentioned trend line, currently at 71.30 USD and if not held, yesterday's lows of 70.55 USD might be tested. Another buying zone could be located at the psychological level of 70.00 USD.
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