US Crude rally continues
US Crude once more broke to a new high yesterday, despite initial ECB-fueled losses. The retracement we are currently seeing is likely to soon turn north for another move higher and thus it is worth watching for intraday bullish reversal signals.
Support levels of interest are at $39.46, $38.94 and $38.65. In particular the $38.94 level represents the peak from the beginning of 2016 and thus it would be expected to hold should price return to that level. The next major resistance level is at $42.00.
Brent in triangle formation
Once more, Brent cannot achieve what US Crude has, failing to not only set a new long-term high, but also failing to break the initial $41.35 resistance level.
This leaves us within a symmetrical triangle formation, where a closed hourly candle above $41.35 would provide a clear bullish breakout scenario. Conversely, a closed hourly candle below $39.82 would likely lead to a more protracted move lower, towards $39.00 support.
However, the outlook remains bullish given the trend coming in to this pattern and thus any move down towards the lower threshold of this pattern looks like a good entry for longs.