Are crude oil bears ready to take the reins once again as we approach year-end?
Check out these key technical levels we’re watching on the 4-hour time frame!
WTI Crude Oil (USOIL) 4-hour Chart by TradingView
WTI crude oil prices have been trading within a newly defined range between $67.00 and $71.00, with the commodity now approaching a significant resistance level. With the holiday season approaching and fewer major market catalysts on the horizon, technical factors may play a larger role in short-term price action (barring a major surprise event of course).
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the euro and the Canadian dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Price action shows a clear sideways ranging pattern, with the market nearly testing the upper boundary around $71.00. The 100 SMA and 200 SMA are converging near the monthly pivot point ($69.38), creating a significant support zone that’s been holding over the past month.
Looking at potential scenarios, bears may consider watching for reversal signals near the $71.00 range resistance, but with a daily average true range of $1.60, price could extend toward this R1 level before sellers really lock in a short-term top.
Resistance and bearish patterns could draw in more technical sellers and send prices back to test the confluence support zone around $69.00, where both moving averages and the monthly pivot converge.
This may be an area to where we’d want to assess whether taking partial profits or full profits makes sense because a break below this support may trigger momentum sellers to step in and take the market towards the range bottom at $67.00.
For bulls, the $69.00 confluence zone has proven reliable for initiating short-term bounces over the past two weeks and in mid-November, typically good for $1.00-$2.00 moves higher before selling pressure resumes. This area may continue to attract short-term dip buyers as long as range-bound conditions persist. If bullish candles develop, a move to the top of the range before the end of the year may be in play given the daily ATR of around $1.60.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of the few economic catalysts ahead that could disrupt this ranging behavior during the holiday period.