Are crude oil bears about to stay in the game for much longer?
A look at the energy commodity’s daily time frame shows a large descending triangle pattern that’s been holding since November last year.
WTI Crude Oil (USOIL) Daily Chart by TradingView
Earlier this week, we looked at a potential break-and-retest setup on the 4-hour chart of crude oil while geopolitical tensions in the Middle East were worsening and stoking global supply concerns.
However, the spotlight just shifted back to a weaker demand outlook, as the latest inventory figures from the API and EIA reflected larger than expected increases in stockpiles.
Are downside pressures about to pick up 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 the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The 100 SMA just crossed below the 200 SMA on this longer-term time frame, suggesting that the odds are shifting in favor of sellers. These moving averages also line up with the triangle top, which just recently kept crude oil gains in check.
With that, keep an eye out for sustained bearish momentum that could drag prices back down to the triangle support at $68 per barrel near the pivot point level ($69.30 per barrel).
Just don’t forget that all the attention on Fed rate cut prospects could still allow U.S. inflation data to impact overall market sentiment and commodity price action. A surge in risk-on flows or anti-USD trends could still spark a bullish triangle breakout past R2 ($72.38 per barrel) that might take crude oil up to the next upside targets!
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier market catalysts when trading this one.
