Commodities Brief: Crude Oil WTI shrugs off early losses, finishes higher after volatile session

FXstreet.com (Barcelona) - It was another volatile day in the commodities markets, as Crude Oil WTI was able to shrug off early weakness in the overnight session and closed up 1.63% at 89.16. The commodity traded as low as 86.37 in overnight trade, before rebounding and trading sharply higher the majority of the European/New York sessions.

The energy complex benefited from a number of things including: weakness across the board in the US Dollar, a sharp rise in the US Equity Market, and the fact that the steep sell offs in previous day’s most likely produced some short covering. “After the two day commodity rout that saw Crude Oil get hammered along with Gold and Silver, the commodity found a bottom marked by a pin bar off the round number at $86 and pushed consistently higher. Considering the sell-off was incredibly impulsive ($11 over 11 days), a bounce was expected, so this could be a short covering rally,” noted Chris Capre of 2nd Skies Forex

From a technical perspective, the daily candle is impressive but the damage done on the longer term time frame charts (weekly/monthly) is something to keep in mind. The weekly chart in particular is very interesting. Using price on close, it appears a pennant pattern (consolidation) which spans all the way back to July 2012, will be confirmed with a weekly close below 91.20. The pattern has bearish implications, and has measured move price target which could open the doors down to $71! A pattern which is this long in time frame, particularly on a weekly chart is always worth keeping in mind.