WTI crude oil has formed lower highs and found support at the $62 per barrel mark, creating a descending triangle on the 4-hour time frame.
Can it go for a breakout next?
WTI Crude Oil (USOIL) 4-hour Chart by TradingView
This energy commodity, which had previously drawn support from rising geopolitical tensions earlier in the week, retreated from its triangle top after the FOMC decision.
As it turned out, Fed head Powell didn’t seem too bothered by labor market risks or stronger calls for more aggressive easing. In fact, policymakers even upgraded some of their growth and inflation forecasts, suggesting a more optimistic outlook.
Can this bring more gains for the dollar or support for crude oil?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. dollar and the WTI crude oil, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Crude oil has backed down from the triangle top and R1 ($63.88) and appears to be setting its sights on the pivot point ($62.79) and triangle support just above S1 ($61.49).
Sustained downside pressure could trigger a break lower, possibly sending price down by the same height as the triangle formation. A bounce off the bottom, on the other hand, could bring crude oil back to the resistance and even spur a bullish break to the next upside targets at R2 ($65.18) then R3 ($66.27).
Moving averages are barely offering strong directional clues at the moment, although a bullish crossover appears to be brewing and the indicators could also hold as dynamic support. Just stay on the lookout for geopolitical headlines that could impact crude oil movements.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
