Failed Wedge and Bearish Continuation
A falling bullish wedge pattern had been developing, with a breakout attempt occurring on September 23. However, after briefly reaching a seven-week high, the breakout failed as sellers regained control. The pattern has since expanded, forming a broader upper boundary connecting the September 26 lower swing high. That move triggered renewed downside momentum, taking prices to a fresh trend low of $60.64 last Thursday.
The decline completed a 78.6% Fibonacci retracement at $60.66, an area now acting as tentative support. A minor counter-trend bounce followed to $61.24, but Tuesday’s reversal near that level signals renewed weakness and a potential continuation of the downtrend.
Watching for a Test of Deeper Support
If crude closes decisively below $60.64, attention shifts toward the 88.6% Fibonacci retracement near $58.39 — a zone that also aligns with a prior bearish measured move target around $58.29. Matching the previous 12.8% decline from the July swing high to this zone strengthens its technical significance.
Upside Resistance Remains Firm
Any short-term bounce would likely meet resistance between the 10- and 20-Day averages, currently spanning $63.00 to $63.25. The 50-Day average near $64.13 represents a stronger cap within a broader bearish structure. Until buyers reclaim those zones with conviction, downside risk dominates, and the once-promising wedge pattern remains under pressure.
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