The price of crude oil settled at $78.95, down $0.65 (-0.82%). Trading was relatively contained, with a low of $78.58 and a high of $80.87, as the market continued to consolidate after Tuesday’s breakout to the topside.
That breakout was technically significant, with the price pushing above both the 38.2% retracement of the decline from the June 3 high at $78.48 and a downward-sloping trend line near the same level. Since then, crude has rotated higher and lower three separate times, forming a tightening range. Each rally has produced a slightly lower high, while each pullback has found support at progressively higher levels near the 38.2% retracement.
Today’s low held about 10 cents above the $78.48 retracement, reinforcing that level as a key technical support and keeping buyers in control for now.
As long as the price remains above $78.48, the technical bias favors another push toward this week’s highs, with the 50% retracement at $82.01 serving as the next major upside target. On the downside, a move back below $78.48, followed by a break beneath the rising 100-hour moving average at $77.84, would shift the advantage back to the sellers.
For now, the buyers have gained some momentum, but they still need to prove they can build on Tuesday’s breakout. The sellers, meanwhile, must reclaim support-turned-resistance to regain control. The technical battle continues.
This article was written by Greg Michalowski at investinglive.com.