Crude Oil Price Forecast: Key Averages Define Next Move

Test of Resistance Near Key Retracement

Crude oil advanced to an eight-day high of $101.36 during Thursday’s session, where it encountered resistance near prior highs from March and around the 50% retracement of the prior decline. The 20-day moving average, near $98.61, was reclaimed during the advance. That was an initial sign of strength, but only if the session ultimately closes above that level. Otherwise, the 20-day average may now define the lower boundary of a resistance zone extending up to approximately $101.19.

20-Day Average Shifts from Support to Resistance

The 20-day moving average previously acted as a key dynamic support level for the bull trend beginning in late February. This marks the first test of resistance near the average since it failed to hold as support following the breakdown on April 8. Therefore, the reaction of price near this level may provide insight into whether the current short-term rally can extend toward the 61.8% Fibonacci retracement at $104.40 or the 78.6% retracement near $110.41.

Short-Term Pullback Risk, Upside Levels in Focus

The first approach to a prior key support indicator is often met with resistance. Accordingly, at least a short-term pullback from today’s high would not be unusual. On Wednesday, the 10-day moving average was reclaimed with a close above it, and it may now act as near-term support around $93.45. If that average continues to hold as support, then the higher target zones above remain viable. In addition, the low swing high at $105.99 should be monitored, as it represents an important price structure level that could help confirm a bullish reversal of the prior decline upon a sustained move above it.

Support Zones Define Downside Risk

Support was clearly seen near the 50-day moving average, now near $87.18, during last week’s pullback low of $81.94. Therefore, it represents a key dynamic support indicator during periods of weakness.

As long as it holds as support, the potential for upside continuation remains intact. However, a decisive break below that level would increase the likelihood of a deeper retracement, putting crude oil on track to test support around the 100-day moving average, now near $73.55 and rising. Such a move would bring price close to a near full retracement of the prior upside breakout from a larger falling wedge formation triggered on March 2, near $70.49.

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