Breakout In Symmetrical Triangle Pattern - WTI Crude Oil - Forex News by Strategia Forex

Breakout In Symmetrical Triangle Pattern – WTI Crude Oil

Posted Tuesday, May 30, 2017 by
Arslan Butt • 2 min read

In the European Trading Session, the  WTI Crude Oil prices were consolidating in a narrow trading range of $49.75 – $49.90. The Organization of Petroleum Exporting Countries (OPEC) failed to halt the bearish momentum in the oil prices.

As referenced in my previous update, WTI Crude Oil Completes 61.8% Retracement, the market turned bearish when the OPEC announcement failed to come up with something for investors. In response to this, we encountered aggressive selling for more than 350 pips.

The News coming from the United States is adding fuel to the fire. The expectations that U.S. Oil production is likely to continue to gain in the medium term has undermined the OPEC'S efforts to support the oil prices.

Forex Trade Idea

In the European trading session, we shared a forex trading signal to sell the WTI Crude Oil below $49.65 with a stop loss above $50 a take profit around $49.45. Our trade floated in profit for a couple of hours, but later the prices got support at $49.48, missing our take profit just by 2 pips. Therefore, we closed the trade manually in profit in order to avoid reversal.  

Fortunately,  the decision was right as the prices reversed and crossed above our entry point of $49.60.

Crude Oil 30 Min Chart - Symmetric Triangle Pattern

Crude Oil 30 Min Chart – Symmetric Triangle Pattern  

 

Technical Outlook – Intraday

On the hourly chart, the black gold has formed and traded in a meager symmetric triangle pattern, which has extended support to oil at $49.70 and resistance at $49.90.  Yup, It's a narrow trading range.

Nonetheless, the oil broke out of the range, and that's where we decided to enter the market. At the moment, the oil has formed a candlestick hammer, which signifies a bullish reversal.

The prices are holding above the 50-periods moving average support level of $49.45, demonstrating bullish power. But the RSI (Below 50) is still trading in a bearish zone.

Now, we need to wait for the U.S. fundamentals, particularly, the CB Consumer Confidence which will be released at 14:00 (GMT) in order to get additional clues about oil demand.  

 
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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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