Crude oil comes back to the key resistance zone. Another rejection or breakout ahead?

After the huge selloff caused by the worse than expected tariffs announcement on
April 2 and the surprising production boost from OPEC+, the sentiment in the crude oil market deteriorated meaningfully.

The pause in the reciprocal tariffs last Wednesday though marked a short term bottom as growth fears eased on expectations of more de-escalation ahead.

More positive news on the trade war front should keep the market supported, while further deterioration could weigh again.

On the 1 hour chart above, we can see the big upward spike triggered by the pause in reciprocal tariffs. We’ve got a pullback from the key resistance around the 62-64 area, but the price is now coming back to retest it. The price action have also formed an inverted head and shoulders pattern with the neckline around the resistance.

The sellers will likely step in around the resistance with a defined risk above it to position for a drop into new lows. The buyers, on the other hand, will want to see the price breaking higher to confirm the pattern and increase the bullish bets into the 72.00 handle next.

This article was written by Giuseppe Dellamotta at www.forexlive.com.