WTI Crude Oil
WTI held the 62 percent retracement of the decline from $72.98 and subsequently broke lower out of an intra-day bearish flag. The 50-day moving average at $68.22 was tested and held on a closing basis, but the break lower out of the flag and the wave down from $70.43 call for $68.0 tomorrow. This is an important objective because it is the 62 percent retracement of the rise from $66.29. Settling below this would be a strong indication the recent move up is over and that prices will challenge support around the $66.29 swing low over the next few days.
For now, resistance at $69.4 should hold. However, to regain a bullish near-term outlook WTI must settle above $70.6, which would then open the way for $71.5 and higher. This is doubtful given the break lower out of the bearish flag and will become must less probable upon a close below $68.0.
Brent Crude Oil
Brent settled back below the 50-day moving average today and the move down from yesterday’s $75.79 swing high accelerated. Prices are now poised to challenge at least $73.7 and $73.0 within the next day or so. The latter is key for the near-term outlook because it is the 62 percent retracement of the move up from $71.3. A close below this would be a strong indication the recent move up is over and would open the way for $72.0, $71.1, and lower.
Today’s $74.9 midpoint should hold upon a test of resistance. Key resistance and the barrier for a more positive near-term outlook again is $76.6. A move above this is unlikely though unless support at $73.0 holds, which is currently looking doubtful.
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