WTI crude oil has broken above the descending trend line that connected its lower highs since late July, hinting that the selling pressure from the previous swing high near $82.50 may be fading.
The breakout suggests that buyers are starting to regain control, but a retest of the former resistance turned support could still be in store before the climb extends further.
Price bounced sharply off the $74.32 low, and the Fibonacci retracement tool drawn from that low to the recent swing high highlights the levels where a pullback could find footing. The 61.8% Fib is at $77.44, the 50% level is at $78.40, and the 38.2% Fib sits at $79.37, which lines up closely with the broken trend line and the 100 SMA.
On the moving average front, price has climbed back above the 100 SMA and is now testing the 200 SMA near the $79.50 region. A decisive break above the 200 SMA would confirm that the path of least resistance has shifted higher, while a rejection here could send price back down toward the Fib cluster to gather more bullish momentum.
Stochastic has pushed deep into overbought territory, reflecting strong buying interest but also raising the odds of a near-term cooldown. RSI is following a similar path higher, edging closer to overbought levels, which supports the idea that bulls currently hold the upper hand even if a pause is due.
If the broken trend line and the Fib levels between $77.44 and $79.37 hold as support on a pullback, WTI crude oil could resume its climb toward the $82.49 swing high or higher. Failure to hold this zone, however, could open the door to a slide back toward the $74.32 low.
WTI crude oil drew another boost from weekend geopolitical tensions, as Iran named a hardline former Revolutionary Guard commander to its top security post and the UAE reported an Iranian missile strike on an ADNOC-linked vessel in the strait. However, Trump told Axios Sunday he’s willing to let economic pressure crush Iran’s economy instead of ordering new military strikes over the Strait of Hormuz blockade.
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