What is decisive for oil in the near-term is the fact, that it failed to create new lows during this week/ Instead, a higher low was posted, which could imply that bears are weakening. There is a short-term triangle pattern on the two-hour chart, which could be broken to either side.
Currently, the resistance seems to be at the upper line of this triangle, at around 26.80 USD, and if a bullish breakout occurs, we could see a rally toward the previous highs of 28.20 USD, or possibly to 29.85 - 30.00 USD.
Alternatively, the support is at the lower trend line of this triangle, currently near 22.50 USD, and if the price drops below this level, we could see a quick retest of the current cycle lows of 20.00 USD. This support is also a significant psychological zone.
The fundamental situation still seems bearish, but a corrective rally in a bearish trend would be welcome.
