Crude oil price breaks lower and moves below the 100 hour MA
The price of crude oil futures has moved lower, with sellers gaining momentum after the price broke below its 100-hour moving average at $81.39.
The move lower follows repeated failures earlier this week to sustain gains above the 50% retracement of the decline from the late-July high to the early-August low. That retracement comes in at $83.87 and has proven to be a key resistance level. The price reached $84.54 on Tuesday and $84.35 yesterday, but buyers could not extend the move higher.
More importantly, after crude initially moved lower yesterday, the subsequent rebound stalled near the $83.87 retracement level. That failure gave sellers the go-ahead to push the price back to the downside, and the bearish momentum has continued into today’s trading.
The latest technical development is the break below the 100-hour moving average at $81.39. Staying below that moving average keeps the sellers firmly in control and shifts the focus toward the 200-hour moving average at $79.47. That represents the next key downside target.
A break below the 200-hour moving average would increase the bearish bias further and open the door for additional selling, with the 200-day moving average at $76.66 becoming a more important longer-term target.
There does not appear to be a specific headline catalyst driving today’s decline. Instead, the move has been technically driven: buyers had their shots above the 50% retracement earlier this week and could not sustain the break. The subsequent failure at that level, followed by today’s move below the 100-hour moving average, has shifted the technical advantage more firmly in favor of the sellers.
This article was written by Greg Michalowski at investinglive.com.