Crude: Symmetrical triangle nears apex

<p><strong>By <a href="http://investmacro.com/contributors/contributor-profile-forextime/">ForexTime</a> </strong></p>
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<li><span lang="EN-US" xml:lang="EN-US">Crude coils within triangle pattern<br />
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<li><span lang="EN-US" xml:lang="EN-US">Prices below 50-day EMA<br />
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<li><span lang="EN-US" xml:lang="EN-US">Incoming EIA could trigger volatility </span></li>
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<li><span lang="EN-US" xml:lang="EN-US">Prices may test upper bound of triangle pattern </span></li>
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<li><span lang="EN-US" xml:lang="EN-US">Key levels of interest at $74.35 &amp; $70.83 </span></li>
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<h3><span lang="EN-US" xml:lang="EN-US">Crude oil is bound within a symmetrical triangle pattern which began on November 30th, 2023.</span></h3>
<p><span lang="EN-US" xml:lang="EN-US">However, it may be set for a breakout as prices coil towards the apex of the technical pattern.</span></p>
<p><span lang="EN-US" xml:lang="EN-US">Over the past few days, oil prices have been choppy despite escalating geopolitical tensions in the Middle East. The global commodity is trading around $72.82 as of writing and could see fresh volatility due to the incoming <strong>Energy Information Administration (EIA) report today.</strong></span></p>
<p><span lang="EN-US" xml:lang="EN-US">It is worth noting that the <strong>American Petroleum Institute (API) </strong>reported a small increase in crude inventories on Wednesday. A similar report from the EIA that shows a buildup may inspire crude bears, (those looking to see crude oil prices decline). </span></p>
<p><span lang="EN-US" xml:lang="EN-US">Furthermore, the <strong>International Energy Agency (IEA) </strong>is also scheduled to publish its monthly market snapshot which could also contribute to the expected increase in volatility.</span></p>
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<p><span lang="EN-US" xml:lang="EN-US">Worthy of note is that breakouts can be in any direction, with statistics slightly favoring an upward breakout in this scenario.</span></p>
<h3><strong><em><span lang="EN-US" xml:lang="EN-US">According to Thomas Bulkowski, in his famous book, “The Encyclopedia of Chart Patterns”, upward breakouts of a symmetrical pattern in a downtrend,</span></em></strong></h3>
<h3><span lang="EN-US" xml:lang="EN-US">· ranks 13 out of 20 similar patterns.</span></h3>
<h3><span lang="EN-US" xml:lang="EN-US">· has a breakeven failure rate of 23%</span></h3>
<h3><span lang="EN-US" xml:lang="EN-US">· has a 36% percentage chance of meeting its price target.</span></h3>
<p><span lang="EN-US" xml:lang="EN-US">Yesterday, January 17th saw a <strong>hammer on the daily time frame</strong> bounce off the upper sloping trendline of the pattern (which has acted as support since December 13th, 2023)</span></p>
<p><span lang="EN-US" xml:lang="EN-US">Crude prices on the daily timeframe may be on its way to test this coil pattern’s downward-sloping trendline (resistance zone). </span></p>
<p><span lang="EN-US" xml:lang="EN-US">This resistance area coincides with the <strong>50-day Exponential moving average at $74.35.</strong></span></p>
<p><span lang="EN-US" xml:lang="EN-US">A breakout to the upside will mean crude prices have to close above this confluence (of the 50-day EMA and the downward-sloping trend line).</span></p>
<p><strong><span lang="EN-US" xml:lang="EN-US">In the event of a breakout, the following resistance levels may be tested. </span></strong></p>
<h3><span lang="EN-US" xml:lang="EN-US">· $76.05: The 100 Fibonacci Retracement level</span></h3>
<h3><span lang="EN-US" xml:lang="EN-US">· $78.89: A significant price area</span></h3>
<h3><span lang="EN-US" xml:lang="EN-US">· $81.27: The 161.8 golden mean Fibonacci level.</span></h3>
<p><strong><em><span lang="EN-US" xml:lang="EN-US">The Fibonacci retracement levels are taken from December 13th low at $67.67 to December 26th high at $76.05. </span></em></strong></p>
<p><span lang="EN-US" xml:lang="EN-US">Continuous weakening demand and a failure to appropriately price in new geopolitical tensions in the Middle East may see crude prices break through the following price levels as it aims for lows below $67.67 (its most recent low posted on December 13th)</span></p>
<h3><span lang="EN-US" xml:lang="EN-US">· $70.83: The upward-sloping line of the symmetrical pattern (which coincides with the 38.2 Fibonacci retracement level)</span></h3>
<h3><span lang="EN-US" xml:lang="EN-US">· $69.60: The 23.6 Fibonacci retracement level</span></h3>
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