Introduction
Crude Oil Futures (CL) are approaching a major support zone after a failed breakout attempt at the downward trendline and 100-week SMA in the previous analysis. The market remains under selling pressure.
As of today, CL is trading at 67.67, down -3.00%, and nearing the key support zone between 66.00 and 68.00. A break below this area would shift the market structure to a more bearish outlook, while a successful defense could trigger a short-term rebound.
CL Technical Analysis
1. Retest of Major Support Zone
- Crude oil has returned to its multi-year support zone, which has held strong since early 2023.
- Price is now testing the lower boundary, with no clear signs of reversal yet.
2. Bearish Rejection from 100-Week SMA (76.31)
- The 100-week SMA acted as strong dynamic resistance, leading to the current sell-off.
- The downward trendline also capped the recent rally, reinforcing the bearish bias.
3. MACD Momentum Remains Bearish
- The MACD is in negative territory, with signal lines widening, suggesting increased downside momentum.
- The histogram remains red, showing no immediate signs of bullish divergence.
Support & Resistance Levels
- Resistance Levels:
- 75.30 (Trendline & Short-Term Resistance)
- 76.31 (100-Week SMA – Key Level for Bullish Reversal)
- 95.12 (Next Major Resistance if Rebound Gains Momentum)
- Support Levels:
- 67.00 – 66.00 (Critical Support Zone – Must Hold to Prevent Further Decline)
- 60.00 (Psychological Level – Potential Bearish Target if Support Fails)
If CL breaks below 66.00, the market could see a larger move toward 60.00. Conversely, if bulls defend 67.00, a rebound toward 75.30 could develop.
Bull & Bear Scenarios
Bull Case: Bounce from 66.00 – 67.00
- A hold at the support zone could lead to a retest of 75.30 and 76.31.
- MACD would need to show improvement, ideally with a bullish crossover to support this scenario.
Bear Case: Breakdown Below 66.00
- A close below 66.00 would signal a major breakdown, likely triggering a move toward 60.00.
- The MACD momentum remains bearish, supporting the potential for further downside.
Outlook Summary
- Short-Term (1-2 Weeks): Bearish, unless price finds strong support at 66.00 – 67.00.
- Medium-Term (1-3 Months): Neutral to bearish, with key resistance at 76.31 needing to break for a trend shift.
- Long-Term (6+ Months): Bearish unless price reclaims the 100-week SMA (76.31).
