Crude Oil Price Forecast: Faces Key Support Levels Amid Persistent Downtrend Signals

Crude oil continued to test support on Tuesday around the 78.6% Fibonacci retracement at 67.79. It fell to a new trend low of 67.33 before finding support and bouncing. Earlier in the session prior support from the October 18 swing low was successfully tested as resistance. Subsequently, sellers took back control. They remained in control at the time of this writing as oil looks to be on track to close in the red and in the lower half of the day’s trading range. Also, notice that the high for the day found resistance at the internal uptrend line. This is bearish behavior (test of prior support as resistance) that shows the progression of a downtrend.

Confluence of Support at 67.79

Nevertheless, crude oil is in an area of potential support, starting with the 78.6% retracement. That level is joined by the 127.2% extended target for a falling ABCD pattern and a prior swing low from December 2023. A sign of strength will be first indicated on a rally above today’s high of 69.15, and then yesterday’s high of 69.54. There is a gap that has not yet been filled starting at yesterday’s high and up to 70.72. Therefore, 70.72 becomes a possible upside target if 69.54 is exceeded.

Below 67.11 Opens to Lower Prices

Looking at price structure, an interim swing low and therefore potential support is a little lower at 67.11. It will likely be tested as support or exceeded to the downside if today’s low fails as support. That would make the technical situation decidedly more bearish as it would put the recent swing low at 65.65 at risk of being retested as a support zone and possibly broken to the downside.

Breakdown from Large Symmetrical Triangle Intact

Keep in mind the crude broke down from a large symmetrical triangle consolidation pattern on September 3. Once support was found at 65.65 it rallied back into the pattern putting it at risk of being a failed pattern. Subsequently, a second breakdown triggered on October 14, leading us to today.

Given its behavior since, of further bearish signals, the bearish nature of the pattern is dominating. If the 65.65 level fails to hold as support, the next lower target is a range from 63.67 to 63.30. That price zone is also around potential support represented by the long-term downtrend line that begins from the 2008 highs.

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