OIL: Awaiting A Breakout But Which Way?!
For the last 17 trading days, Oil has been trapped in a range, between $53 and $57.50 per barrel, with no clear direction forming.
Yesterday's news gave Oil a lift from $53 to $56.50 but didn’t change the technical picture. The news was that Iran leaders will scale back its commitments to the 2015 nuclear deal, this came right after the announcement that USA will do a fresh round of sanctions, all in the hope that Iran exports of Oil will go to zero.
The news does not change the picture from a technical perspective as we are still below the upper boundary at $57.50. However, we do seem to be respecting a small downward sloping trend-line capping price at some good resistance seen at $56.50. Dropping down to the smaller timeframes we do seem to be forming a triple top (Bearish reversal pattern) suggesting downside momentum.
A short opportunity does seem to be presenting itself with good risk to reward back down to the lower boundary of the range with a tight stop just above the most recent highs. A pop above this and past $57.50 would negate the trade thesis.