WTI crude oil triggered a weekly bullish reversal on Tuesday, reaching an eight-day high of $73.04 after the U.S. revoked Iran's oil sales authorization. It marks the first clear sign of a potential bottom after seven straight weeks of losses, though moving-average resistance still stands in the way.
Crude oil printed its first clear bullish signal of a potential bottom on Tuesday, when WTI reached an eight-day high of $73.04 and triggered a weekly bullish reversal. The move followed the U.S. decision to revoke Iran's oil sales authorization, and it broke seven consecutive weeks of declines.
Support zone sparks the turn
Tuesday's advance was a successful test of resistance near the 50-week moving average, which the price broke below two weeks earlier. The bounce came off strong support near a long-term downtrend line and the 78.6% Fibonacci retracement at $68.81, a zone that analyst Bruce Powers expects the trend indicator to reclaim soon.
The scale of the prior slide sets the context. At last week's low of $67.73, crude had dropped around 43.5% from its March peak of $119.54.
Moving averages define the path higher
The next hurdle sits at the 200-day moving average near $74.89, the first upside target of note. Reclaiming that level could also pull in the 20-day moving average, now falling from $75.55 toward alignment with the 200-day line.
Further up, the lower swing high of $79.23 offers another target. Beyond it, the breakdown from a symmetrical triangle triggered near $88.90 four weeks ago marks the key initial objective if the rally extends.
The reversal still needs proof
A one-week reversal does not rule out another test of support before a sustained advance, and Powers cautions that such patterns are prone to failure without further evidence of strength. This week's higher weekly low now acts as short-term support; a drop below it would signal weakening and could open the way toward a new trend low.
Source: FXEmpire
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