US Crude Oil futures formed a rounding top near key resistance during this week's trading action, suggesting a possible short term high has been established. Autochartist has identified the latest upswing as a retest of the upper trend line that forms the Rising Wedge chart pattern illustrated here.
This Rising Wedge continues to develop as an emerging pattern on the 240-minute time frame. With resistance at the $103.50 level now confirmed, Thursday's pullback may indicate a move to retest the bottom trend line. As the wedge is rapidly narrowing towards the apex where both trend lines converge, a breakout to complete the pattern appears likely in the near future.
Traders will be watching the price behavior upon a move towards the $100.00 level for indications of strength. As the market is now near its long term highs, a breach of support would encourage profit-taking at these levels. Continued strength with an eventual breakout to the upside would be viewed as a strongly bullish development in light of the already steep angle of ascent that this market has held since the pattern began to emerge.
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