WTI crude oil continues to slide lower, with price tumbling sharply from the descending trend line resistance and breaking below the swing low support around $75.62 per barrel.
The commodity is currently trading near $75.47, suggesting that the selloff is still very much in play and that bears remain firmly in control.
The descending trend line connecting the series of lower highs since late April has been acting as a reliable ceiling for any attempted rebounds, keeping sellers in the driver’s seat. Price is still hovering around the swing low, hinting that the downtrend could extend further if sellers maintain the pressure.
If a corrective bounce does materialize from current levels, sellers could be waiting at the Fibonacci retracement levels to join the downtrend. The 38.2% Fib is located at $83.96, while the 50% level sits at $86.54.
A larger correction could reach the 61.8% Fib at $89.11, which also coincides with the descending trend line and the 100 SMA dynamic inflection point, potentially making it a strong area of confluence where more sellers could look to hop in.
On the moving averages side, the 200 SMA is above the 100 SMA and both indicators are sloping downward, confirming that the path of least resistance remains to the downside and that any bounce could be short-lived.
Stochastic is deep in the oversold zone and appears to be turning higher, suggesting that a corrective pullback toward the Fibonacci levels could be in the cards before sellers resume control.
RSI is also nearing oversold territory and pointing south, reflecting sustained bearish pressure. A hook higher from current levels would align with a potential bounce toward the Fib retracement zones, where sellers may be looking for fresh entries to push crude oil toward new lows.
Crude oil continues to unwind its war premium while positive developments are being reported. Tankers are able to pass the Strait of Hormuz now that the blockade has been lifted, easing supply concerns.
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