Resistance from Prior Price Zones and Key Averages
The short-term path higher is challenged by a resistance band between $64.46 and $65.58, which includes a prior monthly low turned resistance at $65.46. Clearing $65.58 could bring the next wave of technical tests: the 20-Day moving average at $66.35, the 50-Day moving average at $67.67, and the 200-Day moving average sitting near $68.10. These levels are likely to attract selling pressure if the rally extends.
Downside Targets Defined by Fibonacci Confluence
On the downside, the next key support zone is clustered near $60.78–$60.66 — an area defined by a 78.6% ABCD pattern (purple) downside projection and a matching 78.6% Fibonacci retracement level. This target gains significance after a recent bearish crossover, where the 20-Day moving average fell below the 50-Day moving average, reinforcing the longer-term downtrend bias.
AVWAP Flip from Support to Resistance
An anchored volume-weighted average price (AVWAP) line (light blue), drawn from April’s trend low, played a critical support role through late June and most of July. After holding firm during multiple pullbacks, this line was decisively broken on August 6. From a technical perspective, such a break often turns prior support into resistance. Should crude rally back to this line, sellers may re-engage unless a decisive breakout invalidates the bearish flip and sparks renewed buying momentum.
Outlook: Rally Faces an Uphill Battle
While Thursday’s gain introduces short-term bullish momentum, the move remains a counter-trend rally until crude decisively reclaims resistance above $65.58 and sustains strength through the moving average barriers toward $68. Failure to close above $63.63 would suggest that bullish momentum is fading, with renewed focus shifting toward the $60.70 support zone.
For now, traders should treat this as a tactical rally within a structurally bearish market — one that could provide an opportunity on both sides, depending on whether price action confirms a breakout or stalls at resistance.
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