WTI crude oil futures closed at $60.07, showing a decrease of $2.28 or 3.66%. The trading session experienced volatility, with prices ranging from a low of $58.76 to a high of $63.34.
The market is still processing a sharp decline that took crude down to $55.15, its lowest since February 2021. The recent high approached a significant swing area between $63.61 and $65.29 but did not manage to break through.
Technical Analysis Of Market Movements
The 38.2% retracement level of the 2025 high-to-low move is around $64.92. Currently, sellers dominate below this resistance level, while a rise above $64.92 could indicate a change in market momentum.
That opening section identifies a key pullback in oil prices, pointing to a recent failure to hold within a resistance range that technical traders have watched closely. From a market structure standpoint, the rejection near the $63–$65 zone suggests sellers are still in control for now. The drop to $60.07 after failing to extend above that resistance confirms a lack of follow-through on the bullish side. The 38.2% Fibonacci retracement — at $64.92 — is one of those levels that tend to carry weight during corrections, as it often marks a possible turning point if buyers find enough strength. So far, they have not.
Given that the recent bounce did not even touch this Fibonacci level before reversing, we take that as a sign of hesitation from buyers, or at minimum, a lack of commitment to challenge prevailing downward momentum. With that in mind, our tactical approach in the short term is to treat any rallies towards that upper boundary with caution, especially if volume thins or ranges tighten. Overshoots on low conviction often trap breakout traders and reward those fading strength.
Volatility during the last session was not just large — it was also directionally uncertain. Higher intraday movements from $58.76 to $63.34 covered a meaningful spread, enough to shake out weak hands across both sides of the book. When that happens, it’s often a precursor to a more sustained move — provided the next support or resistance fails to hold. The key is to frame trades around clearly defined invalidation points, rather than chasing midpoint entries.
Market Sentiment And Strategic Adjustments
The rejection from that upper band also offers clues about market sentiment. We think that until there’s a daily close above $64.92 with convincing participation — say, higher-than-average volume and reduced pullbacks — it would be premature to frame a directional bias in favour of the bulls. That doesn’t mean longs cannot work, but they’ll likely need to be managed tactically and with shorter holding horizons in mind.
As it stands, sellers seem comfortable defending above $63, and unless price can base comfortably above that region, we consider the path of least resistance to remain lower. That means watching reactions around $58.76 for a retest, and potentially even a revisit of the February 2021 low near $55. Given institutions often use those zones to flood liquidity back into the market, any approach toward that level needs active monitoring.
We should also look beyond price. Although this current contraction might appear technical in nature, it’s interacting with policy expectations and demand outlooks in ways that we can’t afford to overlook. Weekend news cycles can easily lead to aggressive gaps when markets reopen, adding extra premiums or discounts to initial trades. That makes hedging strategies — and not directional bets — a more prudent focus as conditions remain unstable around key inflection zones.
So, adjustment is necessary. Option structures can provide more flexible exposure, and spreads anchored on implied volatility dislocations may offer more asymmetry than outright positions. We’ve noted that skew on shorter-dated calls has been softening, which could be useful for timing purposes if sentiment shifts more decisively.
In this context, patience should not mean passivity. It’s about sharpening entries and allowing for wider stop placements outside of whipsaw zones, especially around technical markers like the 38.2% Fib that everyone has on their chart. Allowing price to show its hand first is, at this point, not a luxury — it’s a requirement.
