Crude oil: At 20-year support with a double bottom forming

Crude oil is currently testing a long-term support level that hasn’t been touched since it was first broken to the upside back in 2021. This level has been in play for over 20 years, making it one of the more significant price zones in the market. Despite the bearish local structure seen on shorter timeframes, it is critical to recognise that price is sitting at a major high timeframe support zone, something swing traders and investors will want to keep in focus.

On the daily chart, we are seeing an interesting pattern unfold. Oil appears to be forming a classical double bottom right at this long-term support. Adding to the case for a potential reversal is the RSI, which is showing early signs of a bullish divergence. While price is creating equal lows, the RSI is creating higher lows, and while price action is printing slightly lower highs, the RSI is clearly forming higher highs. This combination suggests a potential momentum shift and weakening of bearish pressure.

The key level for confirmation sits around 66. A reclaim and daily close above this area would place oil back into the previous trading territory, potentially opening the door for upside continuation. This development, paired with improving global sentiment and easing trade tensions, especially between the US and China, could support a broader risk-on move. If such a backdrop holds, oil may find fresh momentum from these historically significant levels.

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