By Russell Glaser – The range trading that has trapped the price of spot crude oil appears to be over as the commodity is breaking out of the consolidation pattern.
The 15-minute chart for spot crude oil shows the commodity has been consolidating between the prices of 72.35 and 71.50 for the past 21 hours. Recently the pair broke out of the range, only to retrace back to the upper line of the range.
This presents traders with a good opportunity to trade a breakout strategy for spot crude oil. Now that the price has traced back to the upper line, traders should go long, with a target of approximately 85 pips, which is the distance of the consolidation pattern. A limit order to take profit would be at roughly $73.20, just below the resistance line at 73.25.
A protective stop should be used in case of a false breakout, and placed inside the consolidation range near the level of $72.05.
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
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