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Crude Oil Forecast: Crude Oil Bounces After Initial Selloff – 27 March 2023

The Brent market could seek higher prices, but a bearish flag could also form, implying caution.

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The West Texas Intermediate (WTI) crude oil market experienced a decline during the early hours of Friday, breaking below the $68 level.However, the market later saw some recovery, suggesting the market is attempting to establish a basing pattern.This does not necessarily guarantee a long-term bullish run but indicates that crude oil might be oversold.

There is a possibility that the market could seek higher prices, probably towards the $72.50 level, which has served as significant support in the past. Market memory could influence the area. That being said, I would anticipate quite a bit of choppy behavior if we approached that area, and of course you should keep in mind that WTI may outperform Brent due to the fact that it is more sensitive to US demand than anything else, and of course US economic numbers have been rather strong as of late.

You should also pay attention to the US dollar, because if it starts to strengthen quite drastically, that could cause some problems for oil pricing as well. A stronger dollar typically can weigh upon oil markets, just because the barrels of oil are priced in that very same currency in most markets.

Brent crude oil also fell during Friday’s trading session, indicating a considerable market turnaround.The $77.50 level had previously offered support, making it likely to provide resistance.A bearish flag could also be forming, indicating caution for investors.

If the market breaks below the lows of Friday’s session, it could drop to the $70 level, which is a large, round, and psychologically significant figure. This level has been crucial multiple times in the past, with previous positions put on and options barriers certainly present.

Alternatively, if the market breaks above the $77.50 level, it could head towards the 50-Day EMA, which is close to the $81.25 level. Note that the 50-Day EMA is drifting lower and could present a short-term obstacle. Crude oil prices depend on a healthy economic outlook.

In conclusion, the crude oil market experienced a decline during Friday’s trading session, which could lead to significant market correction. The market could seek higher prices, but a bearish flag could also form, implying caution. Investors should monitor market developments closely and take necessary precautions to protect their investments.

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