Yesterday, crude oil prices slid below their July 2 low of 56.05, and this opened up the door for a retest of the June 19 high of 54.34. The zone around the 54.34 limited gains in crude oil prices from June 3 to June 19 and is, therefore, a potential support level, and likewise take profit level. Below the 54.34 level, the next support level is the June low of 50.61 dollars per barrel.
However, being short or long crude oil prices in the next few weeks looks to be challenging, as the price is consolidating in a large triangle pattern. We can draw a descending trendline via the April and July highs, and an ascending trendline through the 2018 low of 42.40, and the June 12 low at 50.58. The two lines form a triangle like pattern, and the pattern suggests that crude oil prices will continue to consolidate within the two trendlines, until the price experience a sharp rise in volatility and breakout. Today, it will be difficult to know which way the price will breakout but it makes sense to keep an eye on the converging trendlines, and a break to either the June or July high in the weeks to come. Don’t miss a beat! Follow us on Twitter.