Here’s another one for the commodity traders out there!
Do you think Crude Oil is ready to break out of the consolidation pattern soon?
Or will we witness another decline to the descending triangle support?
West Texas Intermediate (USOIL) 4 hours Planned by TV
WTI Crude Oil formed lower highs and found support around the $67 per barrel level, creating a triangle chart pattern that has been in place since last month.
The price is testing the triangle resistance again, and the higher lows from last week indicate that upward pressure is building.
In this case, the upside breakout may follow and lead to a rally similar to the chart pattern’s high.
However, the technical indicators look mixed.
Stochastic is turning higher to indicate that buyers are keen to return and possibly maintain the 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 is a good chance that Crude Oil will drop to the bottom of the triangle.
Don’t forget that the weaker demand outlook for China is currently dampening investor expectations for fuel and energy commodities, as well as risk appetite in general.
Anyway, better keep your eyes peeled for candlestick patterns around the $71-72 per barrel resistance for more clues!