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Oil To Hit $90 per Barrel?

|Includes: USL, The United States Oil ETF, LP (USO)

With oil breaking out above the falling channel resistance at $72.50 yesterday, it now tries to work off the $75 per barrel barrier (trading at $74 per barrel as of the moment). Clearly, the US dollar weakness has plenty to do with this. What could threaten oil's breakout is the dollar index straddling its major downtrend line, a breakout above which could imply a move to $81 on the index. But being a believer in technical analysis, I'd have to give due respect to oil's current breakout over my personal bias that we'll see a dollar rally sooner or later. In fact, reversals are the hardest thing to trade with the lowest probability of success, while oil, on the other hand, clearly has some momentum on its side. A break above $75 per barrel on oil would imply an upside of until $90 per barrel ($15 is the height of the bigger area pattern). So until it becomes otherwise, oil's breakout is clearly legitimate.