Crude Oil Price Forecast: Analyzing Downtrend Risks and Key Levels

Crude Oil Price Forecast: Analyzing Current Market Conditions

Crude oil continues to experience significant price action challenges as it grapples with a large symmetrical triangle consolidation pattern. Recently, it fell to a new pullback low of 70.24 before finding support. However, key technical indicators show that the internal downtrend line and both the 50-Day MA and 20-Day MAs were broken to the downside, confirming further bearish sentiment.

Bearish Sentiment Dominates the Market

The short-lived rally observed in the previous two weeks suggested that a failure of the triangle breakdown initiated at the start of September might occur. Yet, this rally failed to surpass the 200-Day MA, currently positioned at 79.56, as well as the upper trendline of the triangle. The high of the day turned into a key reversal event, leading to the current price retracement.

Next Lower Target at 69.70

• A descending ABCD pattern completes at 69.70.
• The 78.6% retracement level coincides with this target and provides a potential support zone.
• Today's low may suggest a completion of the ABCD pattern, yet uncertainty abounds following the breakdown.

Critical Pivot Zone for Crude Oil

Given the triangle formation, crude oil exists in a pivotal zone. A determination of the trend—whether it continues bullish or bearish—depends on movements through the pattern's boundaries. Important price levels to monitor include the recent swing high of 76.72 and the swing low at 67.11. Support could also emerge from the lower uptrend line rising from the September low.

Rally Above 20-Day MA Needed for Strength

Recovering above the 20-Day MA and subsequently the 50-Day MA is essential for a bullish outlook. Currently, crude remains entrenched in a downtrend marked by declining moving averages. Furthermore, it stays below its long-term 200-Day MA following a test of resistance. A breach below these levels indicates a potential for a continued bearish trajectory.

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