WTI Breaks the March Downtrend. Now It Has to StickUs Crude Oil CFDFOREXCOM:USOILdavidscuttWTI has been constantly pushed and pulled by geopolitical headlines for months, but what I think is really interesting is just how important the technicals have been for movements in the contract throughout that period. Last week, we saw a test and failure at the downtrend resistance running from the March high. That then saw a reversal and follow-through selling, completing an evening star and eventually dragging WTI back towards $80 a barrel. After tagging $80 and briefly trading beneath it, we then saw another doji, followed by a bullish reversal that saw the price reclaim $83.60. Then on Monday, following the latest escalation in fighting between the US and Iran, we saw another leg higher and a breakout through that March downtrend. So even with all the geopolitical headlines flying around, the fact that we’ve continued to see technical patterns work and key levels respected tells me what happens next with this breakout matters. Does it stick, or do we reverse back underneath and start raising questions about the broader bullish structure? $87.65 is the level to watch, marking the high set on August 20. If that breaks, it would snap the sequence of lower highs we’ve seen since the conflict began and increase the probability of a run towards $93.30 or $95 a barrel. And given where negotiations between the US and Iran currently stand, at least publicly, that hardly seems inconceivable. The oscillators are also moving in favour of the bulls. RSI (14) is starting to trend higher and move further away from the neutral 50 level, while MACD has seen a bullish crossover and is also beginning to push higher. When you put that into the mix, it favours long setups over short. The onus is really on the bears now to ram the price back lower. If they can’t, there’s a risk this breakout sparks a far greater move higher. Good luck! DS