The top of the descending triangle held as resistance for crude oil this week, putting the commodity back on track to test the bottom.
Will support hold once more?
Check out these nearby inflection points I’m watching on the 4-hour chart:
WTI Crude Oil (USOIL) 4-hour Chart by TradingView
Remember that triangle resistance we were eyeing on WTI crude oil last time?
Well, it looks like bears were waiting to jump in right there, as the ceiling held and kept the commodity in consolidation, even after geopolitical tensions flared a few days back.
So far, the lack of counterattacks in Israel is dampening global oversupply concerns and probably convincing investors to book profits off their recent long positions.
But just how low can crude oil go from here?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on crude oil and market sentiment, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Price is finding some support at the pivot point level ($74.03 per barrel) since it coincides with a major psychological mark. If this is enough to keep losses in check, crude oil could revisit the triangle top, this time around R1 ($76.57 per barrel) and the 200 SMA dynamic resistance.
The 100 SMA is below the 200 SMA, though, so there could be some bearish vibes left in play. If so, the commodity could carry on with its tumble down to the triangle support that’s right smack in line with S1 ($72.37 per barrel), but a break below this could extend the selloff down to S2 ($69.83 per barrel).
Whichever way you decide to play this setup, make sure you practice proper risk management and keep an eye out for major market catalysts coming up!
Don’t forget to check out our newly launched forex correlation tool!
