Crude oil has retreated from stiff resistance at the 82.50-84.00 area, including the 200-day moving average and the January high. See the previous updates highlighting that the OPEC+ output cut announcement did not imply a start of a new uptrend for oil.
Despite the retreat, the bullish gap remains in place – oil is above the lower edge of the gap. In some instances, the closing of a bullish gap negates the immediately prior bullish move, increasing the risk of a downturn in price.
Granted the price action is still unfolding, but on its own, the retreat is not enough to signify that the March rebound is over. A break above 82.50-84.00 is needed for the outlook to turn unambiguously bullish. Such a break would imply that the year-long downward pressure had faded, exposing the upside toward the November high of 93.75.
Natural gas appears to have found some support at the February low of 1.97. Positive momentum divergence on the daily indicates that the multi-month-long slide is losing momentum. Moreover, the daily candlestick charts show the most recent leg lower (from early March) is consolidation within the downtrend, and not the start of a fresh leg lower.
This minor rebound this month on intraday charts is an encouraging sign. Any break above the crucial resistance area around 2.25-2.40, including the 89-period moving average, the 200-period moving average, could open the way toward the March high of 3.03. On the downside, any break below 1.97 would expose the downside toward the 2020 low of 1.45.
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