WTI crude oil could be done with its slide, as the pair formed an inverted head and shoulders pattern and appears to be busting through the neckline.
How high can it go from here?
Check out the potential targets!
WTI Crude Oil (USOIL): 4-hour
WTI Crude Oil (USOIL) 4-hour Chart Faster with TradingView
After trending lower for the most part of May, the energy commodity appeared to find a bottom around $87.50 per barrel and formed a reversal pattern right there.
Price is starting to close above the neckline resistance around $95 per barrel, possibly gearing up for a rally that’s at least the same height as the chart formation.
Resurfacing geopolitical tensions appear to be driving global oil supply jitters once again since peace talks between the U.S. and Iran are breaking down, and hostilities in the Middle East have been escalating.
The moving averages could serve as a near-term roadblock around $97 per barrel, though, as the 100 SMA is also attempting to cross below the 200 SMA to suggest that bearish pressure is still in play.Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on WTI crude oil and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Look out for a bounce off this area, as a return in downside momentum could drag crude oil back to the area of interest at R1 ($92.85) or all the way down to the pivot point ($89.60).
Should bullish momentum continue to pick up, on the other hand, crude oil could set its sights on the next upside targets at R2 ($97.95) then R3 ($101.20).
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.
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.
WTI crude oil is breaking out of a potential reversal pattern, and geopolitical tensions are adding fuel to the move. Premium members can read our lesson:
📖 How Oil Moves with USD/CAD, USD/NOK, and CAD/JPY
Reading this helps you understand how oil price moves connect to currency pairs, which pairs are most sensitive to crude oil shifts, and how to use those relationships as confirmation signals in your trading.
And if you’re not a Premium subscriber yet, now’s a good time to sign up.
With Babypips Premium, you get full access to School of Pipsology lessons that help you understand not just what crude oil is doing on the chart, but which currency pairs move with it and why.
