WTI crude oil is consolidating inside a descending triangle pattern on its 4-hour chart, and price is currently testing resistance.
Is it about to bust higher from here? Or will we see another dip to the triangle support?
Take a look at these inflection points!
WTI Crude Oil (USOIL) 4-hour Chart by TradingView
After its rallies earlier this week, the energy commodity appears to be hitting a ceiling at the triangle top near the $70 per barrel major psychological mark and R1 ($69.34 per barrel).
A slightly larger than expected EIA inventory build likely convinced oil bulls to retreat, as the numbers could be pointing to slower consumption or elevated supply levels.
Still, geopolitical conflict between Russia and Ukraine appear to be keeping crude oil prices elevated, as escalating tensions could bring production risks for the OPEC+ nation.
So which way could WTI 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!
The 100 SMA is below the 200 SMA on this time frame to suggest that the triangle resistance is more likely to hold than to break, with the faster-moving SMA even lining up with the top to add to its strength as a ceiling.
In this case, look out for a crude oil dip back to the triangle bottom around $66.80 per barrel or for sustained bearish pressure to drag it further south to S1 ($65.65 per barrel) then S2 ($64.40 per barrel).
On the other hand, bullish candlesticks closing above the triangle resistance could suggest that a rally of the same height as the chart pattern is in the works. Still, keep your eyes peeled for potential bounces off near-term resistance zones at R1 ($71.78 per barrel) and R2 ($73.03 per barrel) if a break higher takes place.
As always, watch out for other top-tier catalysts that could impact overall market sentiment, and make sure you practice proper position sizing when taking any trades!
