West Texas Intermediate (WTI), futures on NYMEX, are displaying back-and-forth action below $72.00 in the Asian session. The oil price is expected to remain sideways as investors are awaiting the outcome of the US debt-ceiling negotiations. US President Joe Biden and House of Speaker Kevin McCarthy are scheduled to make further negotiations on Monday. Earlier, US Biden called partisan terms from Republicans unacceptable as the latter demanded an 8% cut on big wrath.

The oil price is auctioning in a Symmetrical Triangle chart pattern on a four-hour scale, which indicates volatility contraction. The upward-sloping trendline of the chart pattern is placed from May 15 low at $69.39 while the downward-sloping trendline is plotted from May 10 high at $73.81. Earlier, the oil price rebounded firmly after forming a Double Bottom chart pattern around March 20 low at $64.38.

The 20-period Exponential Moving Average (EMA) at $72.00 is stick to the oil price, indicating a lackluster performance.

Also, the Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00, which signals that investors await a trigger for decisive action.

Going forward, a breakdown of May 15 low at $69.39 will strengthen the downside bias and will send the oil price to May 04 low at $67.47. A breakdown of the latter will further send the asset price toward 17-month low at $64.31.

In an alternate scenario, a solid recovery above May 10 high at $73.80 will allow the asset for further upside towards May 02 high at $76.06. A breach of the latter will expose the asset to April 26 high around $78.00.

The Double Bottom can trigger a bullish breakout

May 22 2023