WTI crude oil could be getting exhausted from its climb, as the energy commodity formed a double top on its hourly chart.
Can it break below the neckline soon?
WTI Crude Oil 1-hour Forex Chart by TradingView
An improving global trade outlook on the heels of agreements between the U.S. and the U.K. plus a 90-day tariffs truce between the U.S. and China allowed crude oil to rally throughout the first half of May.
However, the positive sentiment seems to be fading, leading the commodity to retreat from the $64 per barrel major psychological mark and dip back to support near the $60 per barrel level.
With the OPEC+ said to be considering another production hike in July while geopolitical tensions between Ukraine and Russia remain elevated, opposing forces appear to be in play for crude oil.
Which way could it go from here?
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!
The energy commodity appears to have completed a short-term double top on its hourly chart and is currently testing the neckline support near S1 ($60.03), so a break below this floor could set off a drop that’s the same height as the reversal pattern.
If that’s the case, look out for a sustained move to the next bearish targets at S2 ($58.19) then S3 ($56.28) close to this month’s lows.
On the other hand, reversal candlesticks could suggest that another bounce is due, possibly sending price back up to the highs near R1 ($63.79) or at least until the pivot point level ($61.95) halfway through.
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!
Disclaimer:
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.
