After peaking at the top of its wedge formation, crude oil appears to be in a decline mode, finding certain buyers at the 38.2% Fibonacci retracement level.
Thanks to bullish predictions for oil demand and the renewal of the OPEC+ output accord, the rise has held for the past few of months. The commodity appears to be rising once more as a result of geopolitical tensions in Russia that flared up early this week.
around these prices, a resurgence of positive pressure should be sufficient to get the commodity back on track to target the highs around $83.16 per barrel close to R1.
However, a more significant drop might trigger a decline below the 50% Fib around the big psychological threshold of $80 per barrel, which might be a more alluring entry position for oil bulls.
The 200 SMA dynamic inflection point is closer to the wedge's bottom, whilst the 100 SMA dynamic support aligns with the 50% Fib to strengthen its floor-like qualities. However, a break below this region might indicate a wedge breakdown and the beginning of a reversal.
Watch for a move below S2 ($78.63 per barrel), in particular, since this might signal the start of a decline that matches the height of the chart pattern.
