$94.34 Marks a Bigger Trend Test
There are two other initial resistance zones that could stop or stall an advance if WTI can get above both the downtrend line and 100-day moving average. The first is near the 78.6% Fibonacci retracement of a prior decline at $90.11, and the second is near the lower swing high of $94.34, which is part of the declining trend structure. However, a decisive advance above the $94.34 level would provide a strong confirming bullish signal for the recovery. If that occurs, the next upside resistance zone is near the interim lower swing high of $99.29 from early June. These levels represent progressively stronger tests of the recovery, with a move through $94.34 having particular significance for the larger trend.
Potential Second Leg Takes Shape
There has only been one leg up since the long-term bullish breakout of a falling wedge triggered in early March. This suggests the possibility of another decisive advance if there is a sustained breakout of the falling channel. The sharp rally following the July low may be the beginning of that second leg up. For now, the key test is whether WTI can convert the current resistance zone into support. A sustained breakout would strengthen the evidence that the July low marked more than a temporary correction and that the next leg of the recovery is underway.
