Oil is at an interesting crossroads right now.
Following OPEC’s agreement to cut supply, demand for the commodity has picked up and with this, up goes the price.
With the technicals showing a nice coiling triangle pattern, the news has seen price rally to resistance where we have seen our first pause since the announcement.
On the daily chart, we can see that while it might look like price has broken out of the triangle, the fact that price has been unable to break the horizontal resistance level just 100 pips above is something to be worried about for Oil bulls.
Anywhere you see a confluence of support/resistance like this, it is worth taking notice of.
Zooming into an intraday chart and price looks even more bearish again, highlighted by a possible head and shoulders setup forming. Now I’m not the biggest fan of these types of subjective setups, but being at a higher time frame resistance level, this one really jumped out at me.
Technical analysis is a self-fulfilling prophecy after all!
Dane Williams – @VantageFX
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