Brent reaches key resistance level
The oil has seen early gains move into the key $50.35 resistance level. This represents not only the 76.4% Fibonacci retracement, but also the top of a rising wedge pattern. With that in mind, the risk/reward associated with being short makes more sense than to be bullish right now.
As such, a bearish view is in play unless we see a break through $50.45. The key signal to a more protracted pullback would be an hourly close below $50, which would point towards trendline support.
US crude reaches triangle top
WTI has reached a crucial resistance trendline which represents the top of a symmetrical triangle formation. Given the break lower from the $50.28 top in late May, there will be many thinking we could be seeing some form of near-term top. With that in mind, it seems likely we will see this triangle top hold, providing a bearish view for today.
Ultimately, the medium-term direction will be determined by an hourly close above $49.62 or below $48.55. Until that happens, it makes sense to continue to play this triangle.