Oil buyers miss technical opportunity as rally fades

On Tuesday, crude oil futures climbed roughly $2, reaching $85.41 in current trading.

The session peak of $86.79 marked the highest since August 21. At that point, the contract was testing the 100-day moving average, situated at $86.73.

Buyers managed to nudge the price above that level momentarily, but the move lost steam quickly and the market reversed lower. The buyers got their chance and failed to capitalise.

So what comes next?

With sellers prevailing near the highs and the 100-day MA, control has shifted to them.

They now need to demonstrate stronger control by pushing through key downside levels.

The first target is the 200-hour moving average at $84.17.

A drop below that level would bring the 100-hour moving average at $82.82 into focus as the next downside objective.

Further down, market participants would then target the rising trendline around $80, then the 200-day moving average at $78.09.

Conversely, if the price fails to break the 200-hour MA with conviction, buyers remain in contention.

However, they would need to recapture the 100-day moving average and sustain above it, which would pave the way for additional gains.

The key takeaway for today is that buyers had their opportunity and let it slip. That leaves sellers with the upper hand, though they still have work ahead.