US crude oil market are watching the price action around the pivotal $100

All eyes in the US crude oil market are watching the price action around the pivotal $100 a barrel level, as the price continues its narrow range around this key long term psychological level. The uncertainty mounting as to which way the price is going to break from here translates into a gradual narrowing of the range to form a classic Triangle chart pattern, show here on the 240-minute US Crude Oil futures chart.

This Triangle chart pattern established a swing low to confirm support just below $100 late in last week’s trading, indicating the possibility this will play out as a continuation pattern with an eventual topside breakout, The formation is maturing quickly, as the price is now reaching the apex of the Triangle where support and resistance converge. With the distance between the two only around $2 per barrel currently, it is likely that the volatility in this market will initiate a directional breakout in the next two to three days of trading.

A breach of the support below $99.80 will signal a failure and project a lower price forecast, whereas a rally above $102.40 would confirm this as a continuation pattern with a call for a renewal of the long term up-trend.

Source: http://www.fxstreet.com/technical/forex-strategy/daily-commodities-update-technical/2011/05/30/