Are crude oil bears about to stay in the game longer?
A look at the daily time frame of the energy commodity shows a large bearish triangle pattern that has been in place since November of last year.
WTI (USOIL) daily Chart by TradingView
Earlier this week, we looked at the potential for a breakout and retest on the 4-hour chart of crude oil as geopolitical tensions in the Middle East were escalating and raising global supply concerns.
However, the spotlight once again turned to the weaker demand outlook, as the latest inventory numbers from the American Petroleum Institute and Environmental Impact Assessment reflected larger-than-expected increases in inventories.
Are negative pressures about to rise from here?
Remember that directional biases and volatility conditions 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 check the economic calendar and stay up to date with daily fundamental news!
The 100 SMA has just crossed below the 200 SMA on this longer-term time frame, suggesting that the odds are shifting in sellers’ favor. These moving averages also correspond to the top of the triangle, which has recently kept crude oil’s gains in check.
However, keep an eye out for continued bearish momentum that could pull prices back to the triangle support at $68 per barrel near the pivot point level ($69.30 per barrel).
Just don’t forget that all the interest in the possibilities of a rate cut by the Fed might allow for this US inflation data To influence market sentiment in general and the movement of commodity prices. A rise in risk flows or unfriendly USD trends could still trigger an ascending triangle breakout beyond R2 ($72.38 per barrel) which could take Crude Oil to the next upside targets!
Whichever direction you end up trading, don’t forget to practice proper risk management and stay aware of top-notch market triggers when trading this.
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