Crude Oil Tests 200-Day Moving Average After Triangle Breakdown

Crude oil hit a new corrective low of $74.12 on Tuesday, testing the 200-day moving average at $74.37 before buyers stepped in. The session closed near $76.50, forming a potential bullish hammer candlestick pattern after a lower high of $77.11.

The 200-day line is the first real support test since crude reclaimed it in late January. Before this week, the rally had not pulled back far enough to touch it. The next layer sits at $72.73, a level that held as resistance-turned-support during the February breakout. Below that, the 78.6% Fibonacci retracement near $68.81 becomes the target.

Last Thursday, crude confirmed a breakdown from a symmetrical triangle consolidation pattern with a daily close below the lower boundary. The following session broke the 100-day moving average, which had also been reclaimed in late January. That failure pointed to the 200-day as the next logical stop. Now that price has reached it, the question is whether demand shows up.

This week's high of $82.46 is the first upside marker. A close above that, combined with the weekly low already in place, would generate a bullish reversal signal. The next resistance cluster sits between $88.64 and $90.08, where the 100-day and 20-day moving averages converge with a weekly low of $88.90.

For traders watching the setup, the 200-day hold matters. If it breaks, the $72.73 zone becomes the next line in the sand. If it holds, the rebound targets the $82 area first, then the $88-90 range. The weekly close will tell which path wins.

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Bruce has over 20 years in financial markets, holds an MBA and CMT charter, and has worked as head of trading strategy at hedge funds and a corporate advisor for trading firms.