The top of the descending triangle has been acting as resistance for crude oil this week, putting the commodity back on track to test the bottom.
Will the support continue again?
Take a look at the nearby turning points I am watching on the 4-hour chart:
Crude Oil WTI (USOIL) 4 hours Chart by TradingView
Remember the resistance triangle we were watching on WTI crude oil last time?
Well, it looks like the bears were waiting to jump in there, as the ceiling has held and kept the commodity in a consolidation mode, even after geopolitical tensions flared up a few days ago.
So far, the absence of counterattacks in Israel has calmed concerns about global oversupply and perhaps persuaded investors to take profits on their recent long positions.
But how low can crude oil prices go 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!
The price finds some support at the pivot point level ($74.03 per barrel) as it coincides with a key psychological marker. If this is enough to control losses, crude oil could revisit the triangle apex, this time around the R1 level ($76.57 per barrel) and the 200 SMA resistance.
But the 100 SMA is below the 200 SMA, so there could be some bearish sentiment. If so, the commodity could continue to decline to the triangle support that is right in line with S1 ($72.37/bbl), but a decline below this could extend to S2 ($69.83/bbl).
Whichever way you decide to play this setup, make sure to practice proper risk management and keep an eye out for major market catalysts to come!