Heads up, oil traders!
The commodity price is consolidating tightly inside a falling wedge pattern on its 4-hour time frame.
Will we see a breakout soon and which direction will it go?
Crude oil has been stuck inside this wedge pattern with its lower highs and slightly lows for the more than a month already.
Is it time for a breakout yet?
Price is sitting right on the bottom of the wedge, deciding whether to bounce back up to the resistance around $90 per barrel or make a break for it.
A move below the $87 per barrel level might be enough to confirm that bears have the upper hand, likely taking the commodity price down by the same height as the chart formation.
Be careful when picking a side, though, since technical indicators are giving mixed signals for now.
The 100 SMA is below the 200 SMA to hint that support is more likely to break than to hold. However, Stochastic is already in the oversold area and is turning higher to signal that buyers are ready to return.
Market fundamentals are giving off bearish vibes for crude oil, as recession jitters continue to weigh on the demand outlook. Downbeat economic figures from China brought on a fresh surge of risk-off flows, with retail sales and industrial production falling short of estimates.
The upcoming release of inventory data from the American Petroleum Institute might spur a big move, especially if the figures highlight a slowdown in demand.
As always, keep an eye out for headlines that might impact risk sentiment as well!
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