Crude oil has been on a sharp rise these days, but can it continue its upward trend past this major resistance area?
If so, how high can it go?
Check out this long term chart pattern on my radar!
Crude Oil WTI (USOIL) Daily Chart by TradingView
Crude oil has been making lower highs and higher lows since July of last year, creating a clear symmetrical triangle on the daily chart.
The price has made a strong bounce from the bottom of the triangle and appears to be halfway towards the top, having encountered some resistance at the pivot point level ($79.22 per barrel) and the dynamic inflection point of the 100 simple moving average.
Can you go further north from here?
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 market sentiment, it’s time to check out the economic calendar and stay up to date with daily fundamental news!
News of escalating geopolitical conflict in the Middle East is raising supply concerns again, sending the energy commodity higher amid expectations of production disruptions if attacks escalate.
However, the focus may soon shift to the overall risk sentiment spurred by the US inflation update, as the upcoming CPI release could still weigh on expectations of a Fed rate cut. While the possibility of a September easing appears likely, traders remain divided on the magnitude of the potential cut.
A return to risk appetite driven by expectations of a further reduction in US borrowing costs could encourage speculators to push crude higher, potentially sending the commodity above the top of the triangle and to R1 ($83.81 per barrel) and beyond.
On the other hand, stronger-than-expected US inflation figures could dampen easing expectations for the rest of the year and could lead to a decline in risk assets.
In the case of crude oil, look for reversal candles at current levels or triangle resistance, as this could take the commodity back to support near S1 ($73.96 per barrel).