WTI oil price expressed in US dollars increased after bouncing from support at 43.20, which is also the lower boundary of consolidation. Rebound led the price to the upper range of the band at 48.25. There is also a zone of confluence, as the upper limit of the consolidation coincides with the trend line downward, led from the top of June.
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In addition, you can see that in this zone a formation of price action has formed – inside bar where the candle from last Friday is fully within the range of the candle from Thursday. Inside bar usually is seen as a continuation of the formation. However in this situation, the setup was formed on the resistance and therefore it is not suitable to speculate in the usual way.
However, there is a chance that the inside bar setup evolves and comes to false breakout from this formation. Such a scenario may therefore lead to the creation of Fakey pattern + inside pin bar. Both of these formations indicate potential reversal. It is worth to observe how the oil market will close today, as there may be the opportunity to take a short position. The aim of the shorts will be then the upward trend line carried out from this year’s minimum or the lower band of consolidation at 43.20.
