Support and Downside Targets
The recent swing low of $62.19, recorded last Wednesday, marks critical near-term support. A decisive break below that level would confirm a continuation of the broader bearish trend. The next lower target is projected in a price zone between $60.66 and $60.60, which aligns with both a 78.6% Fibonacci retracement and a 78.6% measured target from a falling ABCD pattern. Beyond that, a 100% projection of the same ABCD structure points toward $57.71 as a deeper bearish objective.
Signs of Potential Reversal
Despite the weight of lower targets, the recent consolidation suggests bearish momentum has temporarily stalled. This opens the possibility of a short-term bullish reversal – just a possibility. A small double bottom pattern has developed within the formation, with a breakout signal triggered on a move above last Friday’s high of $64.18. If confirmed, this could pave the way for a test of resistance near the 20-Day moving average, currently at $65.78.
Key Resistance Zone
Adding to the potential significance of that resistance area is an anchored volume weighted average price (AVWAP) line measured from the June trend low, now at $65.53. This AVWAP served as reliable support several times through the summer until it was broken to the downside on August 6. A rally back into this area would mark a critical test for the bulls, as reclaiming the 20-Day average and AVWAP is essential to shift momentum in their favor.
Outlook
In the near term, crude oil remains trapped between support at $62.19 and resistance at $64.18. A breakout beyond either boundary is required before momentum improves. Until then, traders can expect further consolidation within this range, though the broader bias continues to favor the bears.
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