WTI crude oil is trading within a descending triangle pattern, marked by lower highs and firm support at $66.85 per barrel on the hourly chart. The price hovers near the triangle’s upper boundary but may soon retest support.
Technical indicators point to bearish momentum, with the 100 SMA positioned below the 200 SMA. This alignment suggests that resistance around $70, a significant psychological barrier coinciding with the triangle’s resistance, is more likely to hold. A breakdown below the support could trigger a drop mirroring the triangle’s height, approximately $10.
Conversely, stochastic oscillators nearing the oversold zone indicate that bearish pressure could be waning. A turn higher in stochastic would signal a potential shift to bullish momentum, possibly pushing crude oil above the triangle’s top and sparking a rally equal to the pattern’s height. Meanwhile, RSI hovers at a neutral level, offering no strong directional signal.
Upcoming economic data could significantly influence crude oil prices. Inventory reports from the American Petroleum Institute (API) and the Energy Information Administration (EIA) are due this week, alongside the critical US non-farm payrolls (NFP) report on Friday.
Robust jobs data might reinforce the Federal Reserve’s less dovish stance, strengthening the US dollar and weighing on commodities. Conversely, weaker employment figures could raise expectations of further rate cuts in early 2025, potentially weakening the dollar and supporting crude oil prices.
Market participants will also keep an eye on leading US employment indicators earlier in the week for additional clues on economic sentiment and demand for risk assets.
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