There wasn’t much movement in July Crude Oil this past week. The market basically retraced about 75% of the previous week’s range before selling off early in the session on Thursday.
The market is still trading inside of a major triangle chart pattern and could remain inside this triangle for several more weeks. The support and resistance lines of the triangle chart pattern extend well beyond July, suggesting a possible range bound trade until the end of the year.
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Currently, the triangle resistance is at $97.26. This is followed by a series of three lower-tops at $97.38, $98.22 and $99.77. On the downside, the triangle support line is at $86.90 this week, followed by the April 18 bottom at $86.16.
The short-term range is $86.16 to $97.38. This range has created a key retracement zone at $91.77 to $90.45. Late in the week, the market tested the 50% level at $91.77. The move drew the attention of profit-takers and bottom-pickers, triggering an intraday short-covering rally.
If the market can build a support base over $91.77 then it may generate enough buying interest to mount a challenge of the series of resistance points. A failure to hold $91.77, however, means an eventual test of the Fibonacci level at $90.45.
Concerns that the Fed was considering tapering its aggressive bond-purchases at its next several meetings, helped drive up the U.S. Dollar recently, making dollar-priced crude oil more expensive…