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Was that a false break or merely a brief dip in US Crude Oil (WT

TVC:USOIL   CFDs on WTI Crude Oil
Volatility reared its head across all markets this week, and the oil markets were no exception.

A combination of geopolitical tensions, general inflationary pressures, and a lingering supply/demand imbalance pushed the price of West Texas Intermediate (WTI) crude oil to its highest level since 2014 early in the week.

However, sentiment turned on a dime in the middle of the week, creating an “evening star” reversal pattern on the daily chart ; for the uninitiated, this relatively rare 3-candle reversal pattern shows a shift from buying to selling pressure and is often seen at near-term tops in the market.

Considering that pattern, along with the broader sentiment shift toward risk aversion, oil bulls are understandably on edge heading into the weekend. While oil prices have recovered off today’s intraday lows as we go to press, the most prudent short-term setup may be to wait for a break beyond this week’s roughly 83.00-88.00 range to signal the most likely next swing for the market. A break below 83.00 could expose 80.00 or even the upper-70.00s next, whereas a bullish breakout could quickly take prices above 90.00.

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