Here’s another one for the commodity traders out there!
Do you think crude oil is ready to bust out of its consolidation pattern soon?
Or will we see another slump back to the descending triangle support?
WTI Crude Oil (USOIL): 4-hour
WTI Crude Oil (USOIL) 4-hour Chart by TV
WTI crude oil has formed lower highs and found support around the $67 per barrel mark, creating a triangle chart pattern that’s been holding since last month.
Price is testing the triangle resistance once again, and the higher lows from the previous week suggest that bullish pressure is building up.In that case, an upside breakout might follow and set off a rally that’s the same height as the chart pattern.
Technical indicators are looking mixed, though.
Stochastic is turning higher to hint that buyers are eager to return and possibly sustain an uptrend.
However, the 100 SMA is below the 200 SMA to suggest that the path of least resistance is to the downside or that there’s a good chance crude oil could plop back down to the triangle bottom.
Don’t forget that weaker demand forecasts for China are currently dampening investors’ outlook for fuel and energy commodities, as well as overall risk appetite.
In any case, better keep your eyes peeled for candlestick patterns right around the $71-72 per barrel resistance to get more clues!