Resistance Confirms and Support Levels Break
The daily high of $64.28 aligned with resistance at the 20-Day average, while the higher swing low at $63.58 failed to hold as support. Each is a short-term bearish sign. These developments reinforce the view that crude remains in a downtrend from the June swing high. Price action continues to trace a falling wedge formation, but near-term weakness places focus on the recent swing low of $62.19. A break below this level would expose the next potential support zone near the 78.6% Fibonacci retracement at $60.66, a level that also aligns with prior consolidation support and the wedge’s lower boundary.
Weekly Chart Shows Bearish Pressure
On the weekly timeframe, crude has formed a bearish outside reversal pattern that will be confirmed on a weekly close below last week’s low of $65.58. Current price action suggests the week could finish in the lower third of the trading range, underscoring downside momentum. The 20-Week moving average, now at $65.29, remains a significant level of resistance. Multiple failed attempts to reclaim it highlight the strength of overhead supply.
Path to Recovery Requires Reclaim of Resistance
For sentiment to shift, crude oil would need a daily close above the 20-Day moving average, followed by a recovery above the AVWAP indicator at $65.50. This level has repeatedly marked support in recent months but has now flipped to resistance. Only a decisive move through these hurdles would reduce the risk of a deeper decline and reintroduce the possibility of testing the 200-Day moving average, currently higher at $67.78. Until then, momentum favors sellers, with downside targets still in play.
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