Oil Builds Bull Pennant Forward of FOMC

WTI Crude Oil Speaking FactorsCrude oil costs put in a robust development from November to March, leaping by greater than 99% from low to excessiv

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WTI Crude Oil Speaking Factors

  • Crude oil costs put in a robust development from November to March, leaping by greater than 99% from low to excessive.
  • Oil costs broke above an enormous long-term trendline in March, and shorter-term worth motion has constructed right into a bull pennant formation.
  • The evaluation contained in article depends on worth motion and chart formations. To be taught extra about worth motion or chart patterns, try our DailyFX Training part.

Crude oil costs proceed to congest following an enormous development that ran from final November into this March. Over this stretch WTI crude oil costs had gained greater than 99%, operating till an enormous zone of long-term resistance started to return into play across the $64-67 space on the chart. That resistance stymied bulls and costs shortly pulled again, quickly turning into a variety earlier than beginning to present bearish potential ought to WTI stay beneath the psychological 60-handle.

However bulls remained persistent and costs shortly pushed again above that 60 stage. There’s additionally been a construct of higher-lows over the previous few weeks that, when mixed with the lower-highs, produce a symmetrical triangle. That symmetrical triangle exhibiting on the prime of a four-month bullish development that produced as greater than 99% makes for a bull pennant formation, typically adopted with the intention of bullish continuation situations.

To be taught extra concerning the bull pennant, try DailyFX Training

WTI Crude Oil Every day Value Chart

wti crude oil daily price chart

Chart ready by James Stanley; CL2 on Tradingview

Taking a step again on the weekly chart and a few issues stand out. That March excessive was a contemporary two yr excessive, and the corresponding pullback, thus far, has been reasonably shallow. But additionally of curiosity is one other trendline and this one is longer-term in scope. It’s proven on the beneath chart in purple, and this can be a bearish trendline projection that for the previous seven weeks has been serving to to carry higher-low assist. That is one other bullish issue within the technical backdrop for crude oil costs.

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WTI Crude Oil Weekly Value Chart

wti crude oil weekly price chart

Chart ready by James Stanley; CL2 on Tradingview

For the ultimate chart, I’m wanting on the month-to-month beneath and that is to focus on the significance of that longer-term trendline that’s at present serving to to kind assist.

The bearish trendline originates from the 2008 excessive and connects to the 2014 excessive. That projection helped to catch the 2018 excessive in October of that yr, in addition to the February 2021 excessive. The month of March noticed bulls grind by way of this stage till, ultimately, it started to assist kind short-term assist.

A continued maintain above that trendline, mixed with the bull pennant formation checked out above, can hold the deal with topside situations for wti crude oil costs within the coming days, particularly contemplating the danger outlay on the financial calendar for the rest of this week.

To be taught extra about correct trendline building, try DailyFX Training

WTI Crude Oil Month-to-month Value Chart

wti crude oil monthly price chart

Chart ready by James Stanley; CL2 on Tradingview

— Written by James Stanley, Strategist for DailyFX.com

Contact and observe James on Twitter: @JStanleyFX

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