WTI Crude Tests $78 Support Zone After Sharp Pullback

WTI crude oil dropped to $78.36 on Tuesday, testing a support zone formed by the 20-day moving average and the 61.8% Fibonacci retracement of the prior decline. Tuesday's low of $78.36 sat just below the 20-day MA at $78.62 and above the Fibonacci level at $77.90. The session closed at $78.40, in the lower third of the day's range, indicating persistent selling pressure, traders said.

The decline extended a pullback from last week's high of $94.34. That high reached the lower boundary of a symmetrical triangle pattern and completed a 61.8% Fibonacci retracement of the earlier selloff at $93.69, traders said. The symmetrical triangle pattern had been forming since March, with boundaries near $94 and $100. The rejection from the lower boundary suggests the pattern may continue to act as resistance, they said. Tuesday's move broke below the 50-day moving average, with the day's high of $83.04 acting as resistance. The 50-day MA had provided support during the rally in August and September, and the breakdown confirms a shift in intermediate momentum, they said.