US crude oil prices look poised to break a technical consolidation level.
Will this lead to another rally for the commodity?
The 4-hour chart may give us more clues:
Crude Oil WTI (USOIL) 4 hours Chart by TradingView
WTI Crude Oil (US Crude Oil Prices) currently has candles above $82.00, which puts the Black Crack above a consolidation area that has been in place since the previous week.
Why not? Weak economic reports from the US are supporting expectations of a Fed rate cut and encouraging risk appetite in the markets. It also doesn’t hurt oil prices that geopolitical conflicts between Israel and Iran-backed Hezbollah are escalating and threatening the continuity of supplies from the region.
Remember that directional biases and volatility in market prices are usually driven by fundamentals. If you haven’t done your homework on crude oil and the US dollar yet, it’s time to take a look at the economic calendar and stay up to date with the daily fundamental news!
Will USOIL’s ride above current consolidation level lead to new highs for the commodity in June?
Look for selling pressure at the R1 pivot point line ($81.31) if the technical resistance zone attracts sellers when today’s US core PCE report encourages risk aversion or buying the US dollar.
Consistent trading above the potential resistance zone R1 would set the asset up for a potential move to the $84.00 psychological level near the pivot point R2 and the previous resistance zone.
On the other hand, a rejection from the $82.00 levels could drag USOIL back into its range between the $80.00 and $81.00 levels. A return to the $79.96 or $79.00 pivot point line is also on the table if today’s themes encourage profit taking near the end of the trading month and quarter.
What do you think? Will crude oil prices make new monthly highs before the end of the week? Or will the bears swoop in and drag it back to the previous consolidation level?