Crude Oil Price Forecast: Bearish Correction Nears Completion

Current Price Action

Crude oil extended its losses on Thursday, printing a fresh pullback low of $59.04. The 20-day moving average at $59.82 was decisively violated after yesterday’s test, with price now trading in the lower half of the daily range and poised to close below that key benchmark for the first time since the October breakout.

Support Cluster

A critical support zone sits immediately below current levels, defined by the 61.8% Fibonacci retracement at $58.94 and the completion of a falling ABCD pattern at $58.71. At point D, the two minor declining legs from the recent swing high (A) match exactly in price change, satisfying pattern symmetry. While a bearish continuation below this zone remains possible, odds favor an eventual bullish reversal here given the prior sharp advance and single-leg structure off the October low.

Initial Rally Context

The rally began with a dramatic bullish reversal on October 22 from a small declining channel. Follow-through was impressive: price exploded higher and confirmed strength via clean breaks above both the 10-day and 20-day moving averages. Resistance materialized near the declining 50-day average, marking the first meaningful pullback since the advance began—classic behavior after a single impulsive leg.

Bullish Reversal Trigger

Key upside validation arrives on a rally above the interim swing high (C) at $60.78. That level aligns with the now-falling 50-day average near $61.96 and a prior support shelf at $61.84, creating a tight resistance band from $60.78 to $61.96. A decisive push through this zone targets the $63.03 prior high, with sustained momentum then challenging the intermediate downtrend line.

Higher Targets in Play

Breakout above the downtrend line opens the path to the 78.6% retracement at $64.55 and the falling 200-day MA near $65.28. These levels represent realistic objectives for a second-leg advance, mirroring the enthusiasm seen in the initial rally off the October bottom.

Outlook

Despite unfolding within a broader declining trend—suggesting potential muted follow-through—the current pullback offers attractive risk/reward once the $58.71–$58.94 zone holds. Watch for reversal signals at that confluence; confirmation above $60.78 shifts the near-term bias firmly bullish and targets $63–$65 in the weeks ahead.

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