Introduction
Crude Oil has bounced this month after dropping from highs of around $105 earlier this year to below $70. We know this was all driven by the conflict in the Middle East, and as the markets digested what was going on, now this bounce is another attempt for CL to get back up testing $90 and possibly even $100.
Trend Analysis
Crude has been in a broad downtrend since the April high near 109.50, with price making a series of lower highs through May and June before bottoming in early July around 67.00. The 50-day moving average (84.34) has been sloping down since early June and remains above current price, confirming the intermediate downtrend is still intact. The 200-day moving average (67.33) is sloping up gently and was tested directly at the July low.
The rally off the 67.00 low has been aggressive, with consecutive strong-bodied green candles carrying price from 70.00 to 79.53 in roughly two weeks. This move has retraced a meaningful portion of the June–July decline and is now running coming close to the 50-day moving average at 84.34.
Structurally, this is a downtrend that is being tested by a sharp counter-trend rally. Until price clears and holds above the 50-day moving average, the primary trend remains lower.
Major Resistance
| Level | Notes |
|---|---|
| 84.34 | 50-day moving average, declining — first major test for the current rally |
| 90.00 | Lower boundary of the June consolidation range |
| 92.50 | Upper boundary of the June consolidation range, prior swing high |
| 100.00 | Psychological level, prior support-turned-resistance from April/May |
| 109.50 | April swing high, upside extreme for the move |
Major Support
| Level | Notes |
|---|---|
| 75.00 | Recent breakout level from the July rally, first line of defense on a pullback |
| 70.00 | Prior consolidation shelf during the early-July basing period |
| 67.33 | 200-day moving average, coincides with the July swing low |
| 51.84 | December/January base, deep downside level if trend fully reverses |
Trade Setups
Setup 1: Fade the 50-day MA (higher probability) Bearish scenario. Crude is rallying into a falling 50-day moving average at 84.34 within an intact downtrend. Trigger: rejection candle (long upper wick or bearish engulfing) forming between 82.00 and 85.00. Target: 75.00, then 70.00. Invalidation: daily close above 85.00, which would signal the moving average has been reclaimed and open room toward 90.00.
Setup 2: Breakout continuation (lower probability, requires confirmation) Bullish scenario. If momentum carries price through 84.34 and closes above it, the down-trend structure is compromised. Trigger: daily close above 85.00 followed by a retest that holds as support. Target: 90.00, then 92.50. Invalidation: close back below 82.00, which would signal a failed breakout.
Setup 3: Support retest (range scenario) Neutral-to-bullish. If the rally stalls below 84.34 and pulls back without breaking down, watch the 75.00–70.00 zone for a bounce. Trigger: bullish reversal candle in that zone. Target: retest of 79.50–80.00, then 84.34. Invalidation: daily close below 67.33, which would put the 200-day moving average support at risk and reopen the path to 51.84.
Summary
Crude oil remains in a broader downtrend but is in the middle of a sharp short-term recovery off the 67.00 low. The 84.34 level (50-day moving average) is the key line in the sand — rejection there favors continuation lower toward 75.00 and 70.00, while a clean close and hold above it would shift the near-term bias bullish toward 90.00 and beyond. The 67.33 level (200-day moving average) is the structural line that keeps the longer-term trend intact as long as it holds.
This analysis is for informational and educational purposes only and does not constitute financial or trading advice. Futures trading involves substantial risk of loss and is not suitable for all investors. Past performance is not indicative of future results. Always conduct your own research and consult with a licensed financial advisor before making any trading decisions.
