Русский
Crude oil completed a $25.53 or 31.6% decline from the most recent swing high of $80.76 on Wednesday, with a low of $55.23. That price level was a successful test of support at the lower line of a long-term descending parallel trend channel. Given the subsequent bullish reaction following the low it seems that the market recognized the price represented by the lower channel line. The subsequent intraday rally surpassed the 38.2% Fibonacci retracement of the internal downswing and got halfway to the 50% retracement at $63.86 on Thursday, today, and established a higher daily high of $63.45 and higher daily low of $58.86.
Additional Declines to Test Support Remains a Risk
Nonetheless, since the lower channel line is falling, additional tests of the line as support could occur below the $55.23 low. Therefore, a drop below that low may not see the same response as a continuation signal that occurs earlier in a trend. There is also potential support a little below Wednesday’s low at $55.00. That is the 127.2% (square root of 161.8%) extension of the bearish retracement starting from the 2023 peak of $95.50.
