Crude Oil Price Forecast: Nears Key Support Levels Amid Pullbacks

Crude oil continued to retrace its prior advance on Tuesday, with a new pullback low of 80.29. The decline completed a 61.8% retracement today at 80.46. Completion of a declining ABCD pattern is next on deck along with a likely test of support around the 50-Day MA (orange). Price symmetry between the AB and CD legs of the pattern match at the 80.10 pivot. Concurrently, a 38.2% Fibonacci retracement completes at 80.15. Meanwhile, the 50-Day line is down around 79.88.

Next Key Support at 50-Day MA

The 50-Day MA is rising and it may be closer to the 80.10 price area before it is reached. It presents a formidable support area given signs that the uptrend from the early-June swing low of 72.73 has been showing improvement. In mid-June, crude busted up through the 50-Day line for the first time since falling below it on May 1. As it pulls back crude is on track to test it as support for the first time since June upside breakout.

200-Day MA is a Little Lower

If the 50-Day line fails to hold as support, the 200-Day MA is a little lower at 79.00. And it matches a 127.2% extended downside target for the ABCD pattern at 79.07. Notice that a 78.6% Fibonacci retracement is also nearby at 79.80. Further, the 50% retracement of the full uptrend, starting from the June low, is at 78.74.

Bull Trend Should Continue Once Pullback Complete

Once the retracement is complete and demand improves, signaled by a bullish reversal, crude is anticipated to be set to continue to advance above the recent swing high of 84.74. That high ended in a 16.5% rally. However, there may be more upside to go. A second possible trendline breakout is first indicated on a rally above the most recent interim swing high of 83.88.

An advance above that price level puts crude back above the downtrend line and in sight of challenging the 84.74 (A) swing high. Rising above 84.74 should see upside momentum improve as it also signals a bullish breakout of a large symmetrical triangle showing in crude oil.

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