US Crude Oil futures continue trading at a very steep discount to the Brent Crude Oil futures, highlighting the disconnect between US and world oil prices in recent months. The continued pressure on prices from a declining stock market and slowing domestic growth has kept the US market to $27 a barrel under the Brent futures.
As traders await a longer term trend to establish itself in the US market, sideways price action has narrowed into a $5 per barrel range and is now moving towards the apex of a large Ascending Triangle chart pattern.
This pattern is illustrated here on the 240-minute time interval to highlight the recent range with support and resistance levels. A quick sell-off towards the end of last week's trading successfully tested support at the $85.50 price level, bouncing from there despite overall weakness in the equities markets.
A technical rally back to the $90.50 level is anticipated from the current price to retest the resistance provided by the top of the Ascending Triangle. A move above this level would trigger an upside breakout from the formation, though there is still room within the overall length of the triangle for another retracement back to the gradually rising support level.
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