The price of crude oil in the United States is showing signs of a possible 4-hour reversal pattern!
In case you missed it, traders have been positioning themselves for this week's possible market movers by selling crude oil since the beginning of the week.
Concerns about increased energy costs from the region have also subsided in light of possible ceasefire negotiations between Israel and Hamas. That, together with the unexpectedly low U.S. GDP from last week, has the markets worried about supply and decreasing about demand.
The psychological $84.00 level, which is not too distant from the $84.75 support zone in April and the 100 SMA area on the 4-hour chart, is where U.S. crude oil (WTI) prices recently turned lower.
We're watching for a possible decline to the $81.00 handle, which would place WTI below the 200 and 100 SMAs and precisely at the potential "neckline" of a Head and Shoulders pattern on the graph.
Extended declines in crude oil prices put WTI at risk of a longer-term slump as well as a possible bearish breakthrough below the reversal pattern.
However, before deciding on its next course, the Black Crack may move between the $85.00 historical highs and the "neckline" support if oil bulls enter the market near the $82.00 or $81.00 regions of interest.
