Are crude oil bears able to take the reins once more as we approach year-end?
Take a look at these key technical levels we’re watching on the 4-hour time-frame!
WTI Crude Oil (USOIL) 4-hour Chart by TradingView
WTI crude oil prices have been trading inside a newly defined range between $67.00 and $71.00, with the commodity now approaching a big resistance level. With the vacation season approaching and fewer major market catalysts on the horizon, technical aspects may play a bigger role in short-term price motion (barring a serious surprise event in fact).
Keep in mind that directional biases and volatility conditions in market price are typically driven by fundamentals. For those who haven’t yet done your homework on the euro and the Canadian dollar, then it’s time to ascertain out the economic calendar and stay updated on each day fundamental news!
Price motion shows a transparent sideways ranging pattern, with the market nearly testing the upper boundary around $71.00. The 100 SMA and 200 SMA are converging near the monthly pivot point ($69.38), creating a big support zone that’s been holding over the past month.
potential scenarios, bears may consider awaiting reversal signals near the $71.00 range resistance, but with a each day average true range of $1.60, price could extend toward this R1 level before sellers really lock in a short-term top.
Resistance and bearish patterns could draw in additional technical sellers and send prices back to check the confluence support zone around $69.00, where each moving averages and the monthly pivot converge.
This may occasionally be an area to where we’d need to assess whether taking partial profits or full profits is sensible because a break below this support may trigger momentum sellers to step in and take the market towards the range bottom at $67.00.
For bulls, the $69.00 confluence zone has proven reliable for initiating short-term bounces over the past two weeks and in mid-November, typically good for $1.00-$2.00 moves higher before selling pressure resumes. This area may proceed to draw short-term dip buyers so long as range-bound conditions persist. If bullish candles develop, a move to the top quality before the tip of the 12 months could also be in play given the each day ATR of around $1.60.
Whichever bias you find yourself trading, don’t forget to practice proper risk management and stay aware of the few economic catalysts ahead that might disrupt this ranging behavior through the holiday period.