Crude Oil Price Forecast: Exhaustion Signals Emerging Resistance

Price Exhaustion After Strong Fibonacci Extension

Crude oil showed signs of short-term exhaustion on Thursday, after reaching a slightly new high for the bounce at $113.43. That advance essentially completed an 88.6% Fibonacci retracement of the prior decline before sellers regained control. Although strength continued with a higher daily high and higher low established, crude oil is set to close the session with a loss and in the lower half of its daily trading range, which would be the weakest closing relative to the range since the current upswing began on April 21.

Immediate Support Levels in Focus

Short-term support is at the day’s low of $105.61, which confirmed prior resistance of a lower swing high of $105.99 from April 13. That level will not be meaningful unless support is sustained above it, suggesting a bullish continuation is possible in the near term. Otherwise, a drop below Thursday’s low has crude heading toward the prior minor high of $101.36 to test it as support. That would align almost with the 20-day moving average, now at $99.30.

Moving Averages Shift from Resistance to Support

On the way up, consolidation formed near the 20-day moving average, showing resistance. Therefore, it should be an area of at least short-term support if approached on the way down. If it is not, and crude falls back below the 20-day moving average, another bearish signal will be generated. Lower potential support for the current daily pattern in crude oil is near the rising 50-day moving average at $91.23. Since support near the 50-day average was clear during the last decline, it should represent support again on another approach. There is also an uptrend line connecting to the April swing low, marking an area of potential dynamic support as well, that lies a little below that average.

Retracement Structure and Broader Support Zone

Recently, a bullish reversal triggered following the April swing low on a move above the daily high of $93.76. Since the 61.8% Fibonacci retracement of the upswing is at $93.97, a lower target zone from around $93.97 to $93.76 is highlighted. Since the 50-day average is rising towards that zone, it will further validate the area the closer it gets before being hit again by price. Taken together, these overlapping support levels suggest crude remains in a corrective but technically structured environment, where short-term rebounds are possible but must be confirmed by sustained trading above key moving averages to avoid deeper retracement risk.

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