Crude Oil Price Forecast: Crude Oil Plunges to 17-Day Low

Crude oil fell sharply on Thursday to reach a pullback low of $66.17, before signs of support were seen. That low was a 17-day low, meaning that the decline took out the lows of the prior 16 days with little hesitation. Crude oil fell for most of Thursday’s session until a minor bounce started heading towards the close for the day.

Nonetheless, at the time of this writing, sellers remain in control with crude oil continuing to trade in the lower third of the day’s price range. This is very bearish behavior that triggered a bearish reversal on the weekly chart and established a bearish outside week. A weekly close tomorrow, below last week’s low of $68.25, would confirm the bearish weekly signal.

Volatility Likely Within One-Week Range

Nonetheless, given the wide trading range for this week, crude oil could trade within the range for some time. The high-to-low price range for the week is $66.17 to $72.49 currently, which reflects a decline of $6.32 or 9.6%. Of course, there is also a chance that crude oil could drop below today’s low and head towards long-term support around $65.40. That was a 22-month low for crude oil. Given the strong bearish weekly reversal signal today, it is looking more likely that the price of crude oil eventually resolves to the downside. It has been largely consolidating for almost two years.

Possible Resistance Levels

Price levels to watch during a bounce for potential resistance start with a $68.37 to $68.53 price range, consisting of previous resistance and the 20-Day MA, respectively. That price range is followed by a range from $68.82 to $69.07. The price range starts with an interim swing low and ends with a minor swing low at $69.07 from Monday.

Support Found at 88.6% Retracement

Despite a very sharp decline today, crude oil respected the deep 88.6% Fibonacci retracement level at $66.20 as the low for the day was $66.17. That ratio is the square root of 78.6%, another important ratio, which is the square root of the golden ratio, 61.8%. This could mean that a temporary floor for the price of crude oil may have been established. It also further validates the usefulness of Fibonacci and harmonic ratios regarding price patterns in crude oil.

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