Crude oil prices pulled back on Tuesday after Monday’s rally higher from a new 5-year low with the spot January 15 contract losing 2.12 to settle at 66.88.
The market is consolidating above an important support level between 64.00-65.00. The January contract briefly dropped under this support on Monday falling to a 63.72 low before recovering.
Whether or not 64.00-65.00 weekly chart support can hold or not will be key test of the longer term trend. If support fails, the trend will remain down with 58.00-59.00 becoming the next support level.
But if support can hold over the next few days, it could be the beginning of a market low.
69.50-70.50 is the first area of resistance followed by the 10 day moving average currently at 72.00.
A rally back above the 10 day average would turn the near term trend back up.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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