Weekly Breakdown Triggers
A potential bearish scenario includes a breakdown from the weekly shooting star triggered today with a drop below July’s low of $65.95. And it looks like the breakdown will confirm with a daily closing price below that level. As noted above there is a key support zone being tested currently from around $65.64 to $64.46.
The range begins with an anchored volume weighted average price (AVWAP) line from April trend low and ends at a 61.8% Fibonacci retracement level of $64.67. This is only a guide and approximation for potential support. Also, included within the price range is the neckline from a double bottom bullish reversal pattern that broke out on June 11. That is a price area that led to reversals several times previously.
Remains in Declining Channel
Overall, crude oil remains in a downtrend, and it has been weakening since the June spike high and bearish reversal from around the top of a large falling trend channel. The lower channel line was successfully tested as support with the low in April. That low was followed by a rally that eventually tested resistance at the top of the channel.
A lower swing high completed last week, showing downward pressure on prices. Despite the potential for support down to $66.67, a decisive drop below that level is likely to lead to lower prices. However, crude oil would be falling toward a large range of potential support that could slow a decline.
For a look at all of today’s economic events, check out our economic calendar.
