US crude oil futures continue grinding higher and remain near the upper end of the current Channel Up chart pattern. Illustrated here on the 240-minute time interval, this pattern holds a short term bearish projection within a longer term bullish trend.
Wednesday's price action retested the upper end of the channel when the price rose to the $90 per barrel level. The brief setback at the resistance trend line suggests a possible top at this level, with a move back down to the bottom of the channel as a possible next leg in the progression of the pattern.
This would yield a drop of about $5 a barrel down to the $85.50 level, which would still be inside the overall uptrend if that support continues to hold. The overall duration and technical clarity of the Channel Up formation encourages the likelihood that nearby crude oil futures will remain in this range for the time being. A move outside of the channel in either direction would initiate a directional breakout, with either an acceleration of the rising trend or a channel failure with a renewed downtrend on a breach of $85.50 per barrel.
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