Resistance for the Day at 20-Day MA

Since crude seemed to have recognized the 20-Day MA, even though it is contained within a rectangle consolidation formation, today’s high along with the 20-Day line marks near-term resistance. A bullish breakout above the 20-Day line will indicate short-term strength, but within a dominant consolidation pattern.

This means that until crude moves out of the pattern and stays out of it, trading will likely remain choppy with low conviction moves. An advance above the 20-Day line has crude heading towards the top of the pattern at 73.27. Also, there may be some reaction on the approach around the 50-Day MA at 71.19.

Decline Possible Below 67.05

A bearish breakdown from the rectangle triggered on Monday as crude fell below the prior low of the range at 67.05. But following a drop 66.86, buyers stepped in and took back control, which led to today’s high. Monday was a reversal day where the day began with sellers in charge as crude fell to a 47-day low, and it ended with buyers back in charge, reaching a five-day high and ending at a six-day closing high. If crude oil can continue to strengthen above the 20-Day line, the internal downtrend may also provide an indication of strength or weakness.

Bull Breakout Above 73.27

If crude can breakout above 73.27 and continue to strengthen it likely heads towards the 61.8% Fibonacci retracement at 74.60, along with potential resistance from a trendline that marks the bottom boundary of a large symmetrical triangle pattern. Subsequently, the 78.6% retracement at 76.57 along with the 200-Day MA at 77.38, becomes the next higher targets.

Downside Trigger Points to 65.65

Alternatively, a sustained decline below this week’s low of 66.86 has crude first testing support around the swing low of 65.65 from early-September. That low was the lowest traded price for crude oil since May 2023. If it fails to hold as support crude next targets the 63.68 to 63.30 potential support zone, which happens to be around the long-term downtrend line.

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