The double bottom chart pattern which I pointed out on WTI crude oil price last week played out nicely. Thanks to OPEC+ production cuts and lower-than-expected US crude oil inventories, WTI crude has made it to $16.00. Now, the commodity is trading at its first critical resistance.
Will Resistance at the Falling Trendline Hold?
By connecting the highs of February 20, March 4, and April 9, it can be seen that WTI crude oil price CFDs is testing a falling trend line. Reversal candlesticks around the $16.00 handle could mean that the commodity is headed to its April 20 lows at $3.42. Fundamentally, a downward move could be triggered by negative developments in the world’s fight against the coronavirus pandemic or news that OPEC+ countries are not fulfilling their promised production cuts.
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Bullish Pennant Spotted on WTI Crude Oil
On the other hand, zooming into the 1-hour time frame suggests that there may be buyers in the market. The commodity has recently made higher lows and lower highs following its strong bullish rally. Consequently, a bullish pennant has formed. An upside break from the consolidation at $16.76 would effectively break resistance at the falling trendline.
What could push oil higher?
An upside break could be sparked by news of a vaccine or lockdowns being lifted. It could then mean that WTI crude oil price is on its way to retest its April 3 highs at $28.66.
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