Crude Oil Price Forecast: Bulls Defend Support Above $67

Trend Consolidation and Bullish Setup

Crude oil consolidated for a third day on Tuesday near the current trend high of $67.39. Tuesday’s range was inside Monday’s range but remained above the breakout level for a bull pennant pattern, which was at $62.23. That pattern triggered to the upside last Thursday and found resistance near a long-term downtrend line that starts from the 2022 peak and connects to the January 2025 lower swing high. That area represents the confluence of two Fibonacci levels.

There is a 50% retracement of the decline that began at the June peak near that high, which is a little shy of a 78.6% Fibonacci retracement of an internal downswing at $67.83.

Support Levels and Pullback Scenario

The bull trend continuation breakout of a pennant consolidation pattern suggests that the downtrend may be reversing and that higher prices could follow. This could occur following a minor pullback towards support of the pennant at $65.57, or after a deeper pullback. In addition to potential support at the $65.55 breakout level, the 10-day average at $64.73 and the 20-day average at $64.43 provide an additional key support zone during weakness.

If crude oil is to have a chance to continue its bullish advance, it needs to stay above the 20-day average. Keep in mind that both moving averages are rising and will soon represent a higher potential support area. Further down is the even more critical 200-day average support at $62.90.

 Bullish Reversal and Higher Targets

A sustained recovery of the $67.39 trend high will confirm another bullish reversal signal above the lower swing high of $66.77 from September. If a daily close then confirms the recovery, higher prices come into view. There is then a 61.8% Fibonacci retracement at $69.48, followed by a lower swing high at $71.33 from July. That lower swing high is key to the downtrend price structure. If it is recovered, another major bullish trend reversal signal would be confirmed.

Long-Term Measured Move Potential

In the bigger picture, crude oil had a bullish measured move of $23.22, or 42%, from the April swing low. A similar move for the current advance would put crude oil around approximately $78.4.

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