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Volatility Likely Within One-Week Range
Nonetheless, given the wide trading range for this week, crude oil could trade within the range for some time. The high-to-low price range for the week is $66.17 to $72.49 currently, which reflects a decline of $6.32 or 9.6%. Of course, there is also a chance that crude oil could drop below today’s low and head towards long-term support around $65.40. That was a 22-month low for crude oil. Given the strong bearish weekly reversal signal today, it is looking more likely that the price of crude oil eventually resolves to the downside. It has been largely consolidating for almost two years.
Possible Resistance Levels
Price levels to watch during a bounce for potential resistance start with a $68.37 to $68.53 price range, consisting of previous resistance and the 20-Day MA, respectively. That price range is followed by a range from $68.82 to $69.07. The price range starts with an interim swing low and ends with a minor swing low at $69.07 from Monday.
Support Found at 88.6% Retracement
Despite a very sharp decline today, crude oil respected the deep 88.6% Fibonacci retracement level at $66.20 as the low for the day was $66.17. That ratio is the square root of 78.6%, another important ratio, which is the square root of the golden ratio, 61.8%. This could mean that a temporary floor for the price of crude oil may have been established. It also further validates the usefulness of Fibonacci and harmonic ratios regarding price patterns in crude oil.
For a look at all of today’s economic events, check out our economic calendar.
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