US Crude Oil futures are holding steady inside of an expansive Ascending Triangle chart pattern, borrowing near term strength from a modest recovery in the stock market. The succession of higher swing lows over the last several trading sessions indicates a possible firming of the market as it moves towards resistance at the $91.00 per barrel level.
Thursday’s price action was confined to a narrow range as the price moved towards the apex of the Ascending Triangle. As the pattern narrows to bring the support and resistance levels towards convergence, a directional breakout is likely to occur soon.
For a successful upside rally, crude will need to push above $91.00 a barrel on solid momentum. If this occurs, it will clear the recent trading range and set the stage for a move back towards long term resistance at the pivotal $100 per barrel level.
A technical failure of the rising trend line support near $87.80 would signal a potential move lower out of the pattern, which may result in a resumption of sideways trade between $80 and $85 per barrel for the time being.
