Crude oil futures closed lower, slipping more than 1% as sellers defended key technical resistance. The contract settled at $58.25, down $0.63 or 1.07%, after initially climbing to a session high of $59.17 early in the day. However, the market lost momentum and retreated into negative territory, reaching an intraday low of $58.12, signalling a clear shift in sentiment as traders faded the earlier strength.

Technically, the rally was capped at the 200-hour moving average, which acted as a strong resistance level and placed buyers on the defensive. Following the failure to break above this moving average, sellers pushed prices down past the 61.8% retracement of the entire rise from the October 20 low at $50.49.

The decline brought crude oil into a critical swing-area support zone between $58.13 and $58.49. This area has been pivotal in recent sessions and was tested at the lower boundary during today’s session. While buying interest held temporarily, the overall price structure remains vulnerable. A decisive break below this support zone would likely trigger further downside momentum and reinforce a broader bearish outlook.

Forex traders should closely monitor the 200-hour moving average and the $58.13-$58.49 support zone. Failure to hold above these levels may open the door to extended declines in crude oil prices, potentially impacting related currencies and commodity-linked pairs.

Original Source: Greg Michalowski of investinglive.com