Testing Key Fibonacci Support
By Thursday, crude oil slid further to test support at the 78.6% Fibonacci retracement near $60.64. For now, that level has contained the decline, though pressure remains as trading continues near the lows. If the June peak at $78.44 is considered the start of the current broader downswing, this latest retreat mirrors earlier aggressive phases of selling. The current sequence could represent only the beginning of another extended decline if momentum accelerates further.
Measuring the Downswings
The decline from last Friday’s high marks a drop of $6.13, or about -9.18%. That compares with a -17.1% decline seen earlier in the year, showing that while weakness is evident, the magnitude has not yet matched the most severe selloff of the cycle. Still, the third downswing since June may not need to exceed the first in order to exert pressure. If the pattern of progressively smaller legs lower continues, a reversal could eventually emerge — potentially from current Fibonacci support levels.
Watching the $58 Zone
A critical downside level remains at $58.19, which would align the current decline almost perfectly with the prior measured move on a percentage basis. That target also coincides with the 88.6% Fibonacci retracement at $58.39, creating a powerful confluence zone. If crude oil continues lower, this area becomes a natural candidate for buyers to test the waters for a reversal.
Outlook
For now, crude oil remains vulnerable, with sellers firmly in control. A bullish reversal from the $60.64 or $58.39 zones could stabilize the market, but until then, the path of least resistance remains lower.
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